Here's Harry Markopolos before the House Financial Services Committee. He's not from Boston, but got his M.S. in Finance from BC, lives in south metro Boston, and worked at Rampart Investment Management Co. from 1991-2004, where he discovered Madoff's ponzi scheme in 1999. Someone who raises an alarm for 9 years is a true whistleblower. Compare him to Enron's 'whistleblower,' Sherron Watkins. I'd use that comparison to define the bar that defines a true whistleblower. A whislteblower does not write an e-mail to a CEO asking if his 'accounting gurus' can hide the fact that the corporate treasury is being robbed. A true whistleblower goes to the authorities and the press.
"I gift wrapped and delivered the largest Ponzi scheme in history to the SEC, and somehow, they couldn’t be bothered to conduct a thorough and proper investigation because they were too busy on matters of higher priority. If a $50 billion dollar Ponzi scheme doesn’t make the SEC’s priority list, then I want to know who sets their priorities."
A lot of the victims thought they were getting a highly-diversified portfolio. However no investor nor the SEC was able to verify whether Madoff's fund was actually executing trades.
"Mr. Madoff was running such a large scheme, of unimaginable size and complexity, and he had a lot of dirty money…When you’re that big, and that secretive, you’re going to attract a lot of organized crime money. Money we now know came from the Russian mob and the Latin American drug cartels. When you are zeroing out mobsters, you have a lot to fear."
Representative Gary Ackerman:“Your mission, you said, was to protect investors and detect fraud quickly. How’d that work out? What went wrong? It seems to me that with all of your investigators, and all of your agency, and all that you described – it was one guy, with a few friends and helpers who discovered this thing nearly a decade ago, led you to this pile of dung that is Bernie Madoff and stuck your nose in it, and you couldn’t figure it out. You couldn’t find your backside with two hands if the lights were on. Could you explain yourselves? You have single-handedly defused the American public of any sense of confidence in our financial markets if you are the watchdog. You have totally and thoroughly failed in your mission. Don't you get it?”