No One Would Listen: A True Financial Thriller

Although I can not prove malfeasance, Merrill Lynch charged me a hefty fee to help me lose a good chunk of my retirement savings. I got out of ML and am doing better managing my own funds, but I could not help wondering about the integrity of our large financial institutions. So I was attracted to Harry Markopolos' tale "No One Would Listen" about how Bernie Madoff and the multiple feeder funds which funneled money to him ripped off the public to a degree never before even imagined . There were several salient reasons for this that we should learn to appreciate. A previous reviewer, David Bryson, argues convincingly from Markoplos' morality tale that regardless of the evidence Madoff was believed and Markoplos was not because of their relative status. Examining financial data takes time and thinking. Evaluating a persons status takes much less of both. Over and over Markopolos relates how people believed what they wanted to believe. Having worked on local political campaigns, I have seen this often and am much less surprised by this blindness and denial than the author. Yet I like to see my observations reinforced by another obviously intelligent person. Who doesn't? The bottom lines in the tale of "No One Would Listen" are very serious and political. Markopolos thankfully spares us the name calling, and partisanship of our current politics. Instead of vaguely and mindlessly saying (as many in politics do now) that we need more government or less government, Markopolos details how the SEC was wasting taxpayer money. He thus admits that eliminating the SEC would be better than financing an ineffective organization. I agree with previous reviewer, Stephen Whitehead, that this book is about the financial integrity of the United States. In the not too distant past that integrity and our relative political stability attracted investors from all over the world to our economic benefit. Markopolos outlines how a restructured SEC (without increasing cost) could and must play a role in maintaining the integrity of our financial markets. Markopolos also names which personnel are helpful and which should be let go. He subsequently approved of the changes the newly appointed SEC chairman, Mary Schapiro, was making as of the date his book was published. She had sought his recommendations and pursued them. We will have to read more about the SEC in future financial journals to see how many of Markopolos' suggestions were successfully deployed. Meanwhile the SEC does seem to be doing better. Last month Wall Street Journalist Susanne Craig and Kara Schannell report: " In one of the largest penalties in Wall Street history, Goldman Sachs Group Inc. agreed to pay $550 million to settle civil charges that it duped clients by selling mortgage securities that were secretly designed by a hedge-fund firm to cash in on the housing market's collapse". Although some critics claim the penalties should have been much larger "The SEC said the Goldman settlement represents the largest penalty it has ever extracted from a Wall Street firm."