Laurels and darts for Markopolos’s new book “No One Would Listen”

Few have told of the Bernard Madoff scandal like Frank R. Casey, current President of Fortune USA but formerly the colleague of Harry Markopolos, the man now famous for blowing the whistle on Madoff and his multi-billion-dollar Ponzi scheme.

Casey recently made a visit to Toronto to promote his friend and former colleague’s new book, “No One Would Listen: A True Financial Thriller,” (Harry Markopolos, John Wiley & Sons, 2010) which details the nearly 10 years it took for he, Markopolos and their small team of believers to finally see Madoff’s pyramid brought down.

The book might have been a true financial thriller if not for Casey’s formidable story-telling abilities, which at a luncheon for the Investment Counsel Association of Canada earlier this month he demonstrated in intricate detail, unveiling what it took for people to finally hear and listen to all the whistling and blowing that Madoff and his firm was a giant fraud.

Indeed, between Casey’s enigmatic presentation and the two-page handout on the Harry Markopolos time line, one could forgo shelling out the $27.95 for the hard-cover version (It’s actually on sale for $16.90).

Still, intrigued by a good thriller, particularly one offering a full account of how Madoff should have been discovered years before the financial crisis, and how demand for cash ironically brought him down, we opted to take a closer gander to see what additional facts about the case could be uncovered. (Click here for a complete time line of the Madoff scandal courtesy of timelines.)

From the first chapter on the book, in the first-person narrative of Markopolos, is a 354-page reenactment of the many, many different steps that first Casey and later Markopolos went through – first to determine Madoff was in fact a fraud and later to try to convince regulators, the press and ultimately Madoff’s own investors that it was the biggest Ponzi scheme in history.

What isn’t great about the book is the constant blunt reminder that, as the title notes, no one would listen. It doesn’t take a detective to figure out that no one did listen for almost an entire decade to Markopolos, Casey or anyone else as Madoff’s lie grew larger, and as his assets under management mushroomed (see graphic below borrowed from AFP detailing some of the banks with the biggest exposure to the fraud).

Source: AFP

Equally unimpressive if not outright disappointing is the lack of admonition that perhaps things could have been approached somewhat differently by Markopolos and his compatriots.  After all, an “eccentric” knocking on the SEC’s doors complaining about an arch-rival competitor who happens to be Chairman of the NASDAQ and one of the biggest games in town may not necessarily be the most astute strategy for blowing the whistle on a bad guy.

Additionally disappointing (but admittedly entertaining) is Markopolos’s colorful embellishment of the storyline: The very first paragraph of the book alludes to an unnamed and unreferenced real estate developer on a JetBlue flight seeing the reports of Madoff’s confession on live television in flight, and subsequently requesting the cabin crew open the door to the airplane to let him out without a parachute. True? Maybe. Backed by any fact or reference? No.

Other elements of the storyline talk about approaches to various members of the financial press, in particular the New York Times and the Wall Street Journal, and their editorial decisions to forgo reporting on the story for lack of time, facts or both – something Markopolos suggests was part of a larger conspiracy.

“In my mind, at least, I was convinced that someone high up at the Journal had decided it was too dangerous to go after Bernie Madoff,” Markopolos writes. But a review of the book by the Journal notes that beyond there being no evidence for the charge offered or even suggested, the Journal’s managing editor in those years, Paul Steiger, referred to the claim as a “fantasy.”

Indeed, much of the book relies on arguably stretched facts and innuendo to belabor the point that most now know all too well: that Madoff had many, many victims who entrusted their life savings to him, and that they got wiped out. While editorially creative, the chapter titles which range from “The Slot Machine That Kept Coming up Cherries” to “Finding More Peters (to pay Paul)” to “More Red Flags than the Soviet Union” further seem to over-emphasize what is now the obvious.

There are certainly many good parts of the book, including detailed explanation of how Markopolos and his team tried unsuccessfully to mimic Madoff’s split-strike conversion strategy and returns, and concluding that it didn’t and couldn’t work the way he said.

There are also details about Madoff’s investors, particularly many of the European banks, who seemed to buy into the “cult of Bernie,” as Madoff writes, with very little questioning. The slaps at the SEC’s failings throughout, while again somewhat belabored, are also insightful.

In short, No One Would Listen is generally an engaging read, particularly if you can succumb to the somewhat embellished and frequently unsubstantiated facts, and you haven’t heard Casey on the speaking circuit tell the Coles Notes version.

The bottom line is: This is the story of the few that saw Madoff for what he was long before anyone else, including billionaire investors, securities regulators and even some of Madoff’s closest business colleagues and confidants. It is an interesting and worthwhile read.

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