on Today Show - Harry Markopolos — Transcript

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1. 0:01[Music]
2. 0:07[Music]
3. 0:09imagine stumbling across the largest
4. 0:10financial fraud in US history but when
5. 0:12you Tred to expose it no one listened
6. 0:15that is what happened to this man after
7. 0:17he realized Bernard mof's investment
8. 0:19operation was actually a $65 billion
9. 0:22scam we'll talk to Harry maropis in a
10. 0:24moment but first how the house of made
11. 0:26off
12. 0:28collapsed Bernie made off a sentencing
13. 0:30for masterminding the largest Ponzi
14. 0:32scheme in history it was the news that
15. 0:34rocked the financial world on December
16. 0:3711th 2008 respected financier Bernard
17. 0:40maof was arrested in his New York City
18. 0:42Penthouse apartment by federal agents
19. 0:44after admitting to his sons that he had
20. 0:46been running quote basically a giant
21. 0:49Ponzi scheme the losses were staggering
22. 0:52first thought to be 50 billion they
23. 0:55finally totaled 65 billion in real money
24. 0:58and imaginary profits we are struggling
25. 1:01to pay our motor home Bill and to put
26. 1:04food on the table and he took our life
27. 1:07away from us Bernard mof pleaded guilty
28. 1:09and was sentenced to the maximum term
29. 1:11150 years in Federal Prison maid off had
30. 1:15operated for years under the radar of
31. 1:18regulators victims asked how could the
32. 1:20Securities and Exchange Commission
33. 1:22Watchdog for investors not have known
34. 1:26The Awful Truth was they did know for 8
35. 1:28years one man tried to tell them Boston
36. 1:31Trader Harry maropis but this warning
37. 1:34was ignored and lost in a sea of
38. 1:36bureaucracy Harry maropis is now telling
39. 1:38his story in the new book no one would
40. 1:40listen a true Financial Thriller Harry
41. 1:42great to have you here good morning
42. 1:44great to be here now I want to start
43. 1:45right off I said at the end there one
44. 1:46man tried to warn people you want people
45. 1:48to know right off the bat that you
46. 1:50worked as part of a team there were
47. 1:51others working on this as well I had a
48. 1:53fourman team we were tracking Mt off
49. 1:55across two continents for eight and a
50. 1:57half years you you work for a Securities
51. 1:59firm up in Boston and basically people
52. 2:02in the business started to hear about
53. 2:03the returns that Bernie maid off was
54. 2:05getting for his investors and your boss
55. 2:07has said to you look Harry reverse
56. 2:09engineer this we want you to use his
57. 2:11system and see if you can duplicate his
58. 2:13results you worked very hard it hard at
59. 2:16it but you couldn't do it it was
60. 2:17impossible it was clear in five minutes
61. 2:19that the strategy was bogus as a $3 bill
62. 2:22I had to model it couldn't replicate it
63. 2:24and I we were losing customers to this
64. 2:26man every legitimate money manager
65. 2:28across the world was losing clients to
66. 2:29burn made off so so the alarm goes off
67. 2:31in your head and the and the heads of
68. 2:33the of the team that you were working
69. 2:34with and you go to the SEC not once not
70. 2:37twice not three times but four separate
71. 2:40times starting in 2000 and either they
72. 2:44didn't understand what you were trying
73. 2:46to tell them or the information fell
74. 2:47through the cracks they didn't
75. 2:49understand they had lawyers there not
76. 2:51Finance people they weren't capable of
77. 2:53understanding what I had written and
78. 2:54presented to them I'd gift WRA this case
79. 2:56and and delivered it on a silver platter
80. 2:58and they still didn't take it at one
81. 3:00point B uh Harry didn't they call Bernie
82. 3:02maid off in for an interview they called
83. 3:04him in but he was the only person they
84. 3:05ever talked to they never talked to any
85. 3:06of his staff if they had the stories
86. 3:08wouldn't have meshed and they could have
87. 3:09solved this case how long in your
88. 3:11opinion with your background in your
89. 3:13resume and given that the SEC is
90. 3:15supposed to be the Watchdog over these
91. 3:18kinds of Investments how long do you
92. 3:20think it should have taken them to get
93. 3:21this half an hour at the most and they
94. 3:25they did nothing for 10 years nothing
95. 3:27for 10 years it parts of this book Harry
96. 3:30read like a like a a manual on
97. 3:32investments and and government
98. 3:34bureaucracies other parts of it read
99. 3:37like a real Hollywood Thriller at one
100. 3:40stage during your investigation and
101. 3:42you're trying to uncover this Ponzi
102. 3:43scheme for the world to see you began to
103. 3:46fear for your life and I want you to try
104. 3:49to explain to our viewers why you
105. 3:50started to feel that way in June 2002 I
106. 3:53took a key trip to Europe with a French
107. 3:55nobleman I was meeting a a very high
108. 3:58money crowd it was an offshore crowd in
109. 4:00the UK France and Switzerland and at
110. 4:03that point when I saw the offshore
111. 4:04nature of this funny money the money
112. 4:06coming in was hidden untaxed money and I
113. 4:09knew there was organized crime
114. 4:11connections to this case at that time
115. 4:12and so basically to connect the dots
116. 4:14here you're thinking wait a second if
117. 4:15organized crime is involved in this and
118. 4:17they're reaping huge benefits from
119. 4:19Bernie madeof scheme the last thing
120. 4:21they're going to want to see is someone
121. 4:23blow the whistle on their gravy train
122. 4:25manof was victimizing the Russian drug
123. 4:27Russian mob and the drug cartels he had
124. 4:29a lot to fear there there's something
125. 4:31else in this book that astonishes me and
126. 4:33I need you to explain this at some point
127. 4:36during this period where you're trying
128. 4:37to expose Bernie made off you said to
129. 4:39yourself first of all you went out and
130. 4:40bought a gun okay to protect yourself
131. 4:43but you took it a step further you said
132. 4:45look if Bernie ma off contacts me
133. 4:47directly or indirectly and threatens me
134. 4:50in any way I am going to prepare myself
135. 4:53to kill him it was the only choice it
136. 4:55was him or me this man was a human
137. 4:57Predator he'd have no social constant to
138. 4:59about taking me off the face of the
139. 5:01Earth was me or him take this the right
140. 5:03way Harry I'm looking at you I'm sitting
141. 5:04across from you you look like an
142. 5:06accountant okay you don't look like a
143. 5:08guy who's going to go commit a hit on
144. 5:11another human being how did you get to
145. 5:14that stage where you actually thought I
146. 5:15may have to go out and kill Bernie maid
147. 5:18off and how would you have explained it
148. 5:20to law enforcement well I would hope not
149. 5:22to get caught I certainly had good army
150. 5:24training and it it really was a it
151. 5:27really was him or me I had a family to
152. 5:29protect the government wasn't protecting
153. 5:31me they were not doing their jobs and I
154. 5:32felt forced into a rather difficult
155. 5:34moral
156. 5:35dilemma you talk about the incompetence
157. 5:38or dereliction of Duty at the SEC and a
158. 5:40lot of people are going to say okay that
159. 5:42was starting in 2000 we're now in we're
160. 5:45now 10 years later what's changed in
161. 5:47your opinion what has changed what
162. 5:49lessons did they learn from this it
163. 5:51rocked the SEC to its foundations
164. 5:53they're turning a this agency around it
165. 5:55was nonfunctional they're trying to
166. 5:57become dysfunctional it's crawl walk run
167. 5:59run it's going to take them years to get
168. 6:01to the Run stage so right now if if
169. 6:03there are other people committing Ponzi
170. 6:05schemes uh in this country do you think
171. 6:08they are at a greater risk of being
172. 6:10caught or are they also going to operate
173. 6:11under the radar for a long time the SEC
174. 6:14is really attuned to Ponzi games they're
175. 6:15bringing more and more of those to
176. 6:16Justice whereas before they ignored them
177. 6:18now they're being very aggressive and
178. 6:19pursuing them so I I feel very good
179. 6:21about some of the positive benefits of
180. 6:23this case but there are very few there
181. 6:25there are so many people who who watch
182. 6:27this whole story unfold and and a lot of
183. 6:29those people have one major question
184. 6:31right now and that is could Bernie maof
185. 6:33have done this alone or even with just
186. 6:35one or two other people I'd like you to
187. 6:37shed some light on that he had a global
188. 6:39conspiracy he's operating in 40 Nations
189. 6:42he has 339 different companies feeding
190. 6:44him new victims he's passing along over
191. 6:4690% of the fees to the people helping
192. 6:48feed victims into this game he had a lot
193. 6:51of help he had the big Banks helping him
194. 6:53he had some custody Banks helping him
195. 6:54helping him in a criminal way or helping
196. 6:56them with just turning a blind eye
197. 6:57turning a blind eye they accounting
198. 6:59firms returning a blound eye third party
199. 7:01plan administrators all the companies
200. 7:03feeding them victims no one ask the
201. 7:05right questions no one everybody talks
202. 7:07about the incompetence at the SEC but
203. 7:09what about the investors who were
204. 7:11especially the hedge funds that were
205. 7:12funneling money into Bernie maid off who
206. 7:14were supposed to be doing their due
207. 7:15diligence on behalf of their investors
208. 7:17and did nothing was it incompetence on
209. 7:20their part or sheer greed it was sheer
210. 7:22greed they assumed that mad off was
211. 7:24front running and illegal activity so
212. 7:25they didn't want to ask questions that
213. 7:27they didn't want to hear the answers to
214. 7:28and so they turned a blind eye never did
215. 7:30any due diligence checks I I think that
216. 7:32that even an average investor will find
217. 7:34your book fascinating what is the
218. 7:36takeaway for that person the the average
219. 7:39the typical investor what lesson should
220. 7:41they learn from this don't trust your
221. 7:43government do your own research use
222. 7:46common sense if you don't understand the
223. 7:47strategy don't invest in it Harry
224. 7:50maropoulos no one would listen a true
225. 7:52Financial Thriller Harry thanks so much
226. 7:54thank you for having me