Chasing Madoff

Chasing Madoff is an eye-opening documentary that chronicles the long and often frustrating campaign of financial analyst Harry Markopolos to bring federal regulators’ attention to the brazen investment scams engineered by now-convicted felon Bernie Madoff.  This is an in-depth exposé of how one man saw through a fraud of huge magnitude and chose to do something about it — when others including the SEC did not.  A lot can be learned from this film about what really happened — the stuff we never saw or heard about in the media.  The movie unfolds like a thriller–but it is all true.

In 2000 a pro in financial products at an investment firm is asked to develop a rival product similar to the one Bernie Madoff is offering, which he concludes is a fraud, a Ponzi scheme (explained below).  Markopolos asks two colleagues to look at the material, and they come to the same conclusion.  Then they spend the next nine years trying to get the SEC, Barrons, The Wall Street Journal and others to pay attention to the fraud.  When they have no success getting anyone to listen, they turn their facts over to a financial investigative reporter, who writes an exposé.

The film tracks the nine-year effort of this small team of financial investigators led by Harry Markopolis to expose Bernie Madoff.  The documentary is an intriguing story about Markapoulos, who put his life and the lives of his family in danger by crawling into the bowels of the investment world to gain information about the biggest Ponzi scheme rip-off of all times.  With billions of dollars at stake, I understand Markapoulos’ fear for his life and family.

There were “feeders”, investment managers who did nothing more than pass their clients’ money on to Madoff.  International banks and investment companies were in on the action–even ones that deal in the “dirty money” from drug cartels and terrorist organizations.  Many on The Street had grave misgivings about Bernie Madoff and his unprecedented, meteoric earnings records.  Why were these big players keeping their eyes closed and their mouths shut about their friend Bernie?  This is a thorough and revealing exposure of the callousness of the feeder funds, European Banks, and European titled class — which all showed no interest in revealing anything as long as they could feel that they had an inside track and were making money.  I work in this field and know almost every single one of the financial firms mentioned.  It’s weird, a lot like hearing something horrible about someone you know personally.  This movie made me sick — but in the way it should have.

Markopolos got information to the United States government, and to key players in the media world, including the Wall Street Journal — all to no avail.  Even when the media eventually came out with the full story in several publications, such as Forbes.  Did anyone bother to investigate?  No.  All this went on for nearly nine years, despite it being brought to the government’s attention at the SEC.  The SEC was asleep at the wheel – or worse.  The amazing thing we see in this documentary is that no one charged with the responsibility to investigate such matters chose to do so, despite overwhelming evidence.  As fact after fact unfolds, you cannot believe the inept incompetence of the regulators.  Why did the Securities and Exchange Commission just ignore the hard facts being sent to them?  The SEC gives flimsy excuses for letting the biggest Ponzi scheme in history last as long as it did and grow as big as it did.  Despite clear evidence provided to them, the SEC refused to take any action.  The SEC team played ‘ostrich’!  It illustrates the ineffectiveness of the SEC and the wimps that are associated with it.  They all should have been jailed, but were allowed the opportunity to resign.  Disgusting.  It is quite an indictment against the federal government’s willingness to regulate.  The film presents a strong case worth thinking about, esp. as the Repubs push back against regulation.  It illustrates the fact that greed rules.  I am an individual investor interested in the details of Markapoulos’ attempts to expose Madoff.  After viewing, I was amazed how inept our government is with respect protecting the public.  Are these the same type of experts that are “fixing” our economy?

Ultimately what forced the issue was not these efforts by Markopolos, but rather the 2008 financial collapse.  As with any Ponzi scheme, when the inflow of funds cannot match the promised payouts, the scheme collapses.  If only his persistence and professionalism had somehow ‘prevailed’ in the end anyway.  The members of this team deserve our thanks and respect, particularly Markopolis.  I had no idea that there was such a well-informed whistleblower for years before the Madoff scandal hit, and that the Madoff scandal went so far and so deep.  I came away from this film with nothing but admiration and gratitude for the whistleblowers of the world like Harry Markopolos.

This is an important historic documentary.  This shows how the government SEC sold out to Wall Street and did not regulate Madoff.  Without Markopolus and his team exposing the SEC on Madoff, the new Dodd-Frank legislation, which is the most sweeping since the Great Depression, may have never got off the ground.  This is a story that needs to be told, and needs to be seen.  A lot of really smart people were financially destroyed by Madoff, and that should never have happened.  Such a thing will happen again to those who aren’t paying attention.  Anyone who has an investment portfolio should watch this movie.  If you are interested in the behind-the-scenes story of Madoff’s fall, the how and why’s, then this is the flick to watch.  Must-see viewing, especially for anyone interested in finance, accounting, auditing, or investing.

I found the movie to be very informative and interesting, spellbinding and enlightening.  Despite this being a documentary, it has all the intrigue, suspense, and action of any good flick out of Hollywood.  Will keep you riveted to the edge of your seat.  Once I started to watch it, it was such an intriguing story that I couldn’t stop.  We watched it twice!  This is a movie that you must see.  Without a doubt, deserves 5-stars!  Top honors.  Not only is it stylish and entertaining, it is also more informative than Frontline’s The Madoff Affair.  Chasing Madoff is a documentary, 2010 NR 91 minutes.

(A Ponzi scheme is a fraudulent investment operation where the operator pays returns to its investors from new capital put in by new investors, rather than from profit earned.  Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of returns that are either abnormally high or unusually consistent, or both in Madoff’s case.  Typically, extraordinary returns are promised on the original investment.  The promoter sells shares to investors by taking advantage of a lack of investor knowledge or competence, or using claims of a proprietary investment strategy which must be kept secret to ensure a competitive edge.  Ponzi schemes occasionally begin as legitimate businesses, until the business fails to achieve the returns expected.  The business becomes a Ponzi scheme if it then continues under fraudulent terms.  Whatever the initial situation, the perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.  The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920 in the USA.  —  from Wikipedia)

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