“No One Would Listen”
Author: Harry Markopolos (Wiley, 2010, 333 pages)

Reviewed By Cecily Raiborn, Ph.D., CPA, CMA – Texas State University

No One Would Listen tells of Harry Markopolos’ investigation into Bernard L. Madoff Investment Securities (BLM). Markopolos determined rapidly thatMadoff’s “split-strike conversion strategy” could not produce BLM’s stated returns. However, the SEC ignored the warnings of this questioning quant and his small group of sub rosa sleuths—not once or twice but five times over nine years.

The book tells of Markopolos’ journey from being pressured by his bosses to replicate Madoff’s investment strategy all the way to testifying before Congress after Madoff’s confession about explicit problems at the SEC. Although others in the investment community sometimes indicated an agreement with the idea that Madoff was a fraud, no one other than Markopolos and his team really wanted to get involved. Had the SEC listened to his original complaint in 2000, Markopolos estimates that about $43 billion of investor losses could have been prevented!

Markopolos describes the SEC as an organization that “hires unqualified, sometimes undereducated people” and that “pays peanuts and then wonders how it ended up with so many monkeys.” These, by the way, are some kinder words that he has about the SEC! Suggestions for improvements at the SEC are succinct and sound. But, most of all, the book highlights the importance of whistleblowers in finding organizational fraud. Markopolos blew the whistle not only on Madoff’s fraud, but also on the SEC’s incompetency. The book is a must-read for anyone who has—or might ever have—money in the market.

Cecily Raiborn, Ph.D, CPA, CMA
McCoy Endowed Chair in Accounting
Texas State University – San Marcos