Ray Pellecchia at the NYSE blog Exchanges (via Salmon) writes that had Harry Markopolos sounded the alarm about Bernard Madoff by putting his charges up on a blog, instead of taking them to the SEC and selected investors, there’s a good chance the Madoff scheme would have come tumbling down in short order — except, of course, for the not-unreasonable fear that Madoff might have sued.
P.S.: Unrelatedly, this AP report quotes Markopolos as testifying to the Hill panel yesterday that “the SEC is overlawyered”. (Most of the news accounts, however, insert a hyphen in the quote: ‘over-lawyered'”.)
2 Comments
Wow, that Markopolos complaint was awesome. I think he went a little over the top, though, with his wording. He is conveying the “OMG!” factor of his findings but regulators don’t like that.
My take from the Markopolos hearing is that people at the SEC couldn’t follow his rational arguments. Those arguments held sway with several brokerage houses who advised against investing with Madoff.
I find merit to Mr. Markopolus’ suggestion that overlawyering contributed to the problem. Lawyers are supposed to be able to argue either side of a proposition. By training their treatment of logic is distorted.
Remember the Aluminum tubes. Iraq ordered high performance Aluminum tubes. Centrifuges used for Uranium separation use high performance Aluminum tubes. That is the arguement put forth by Ms. Rice.
The people in the Energy Department said the tubes were the wrong length and the wrong diameter for Centrifuges. And they had a chemical treatment that would interact with the Uranium gases used in separation.
I believe that Ms. Rice saw the two sides as equivalent. The inability to understand logic is killing us as a country.