Book Review No One Would Listen: A True Financial Thriller
Summary of the Book
Harry Markopolos introduces the book to the reader on the accounted date of December 11, 2008. December 11, 2008 was a crucial day Bernie Madoff was arrested. Madoff was arrested for creating and running a Ponzi scheme. The Ponzi scheme was the largest in history of United States. Markopolos makes sure that the reader comprehends the revelations by incorporating a short story of a man in a plane. The man is shocked by the streaming exposures on the CNBC. The man reveals to his wife that they have lost millions of dollars they had invested with Madoff. However, the wife assumes the admissions and continues with her business. The man contemplates committing suicide by jumping out of the plane. This is merely the presentation of investors who had invested with Madoff felt after the revelations on the scandal.
Markopolos was a trained Chartered Financial Analyst and Certified Fraud Examiner at the Rampant Investment Management Company. He assumed the position of portfolio manager at the company. Frank Casey a marketing representative for Markopolos revealed that he had information on a manager who generated about one to two percent returns on investments. This was a compelling idea to Markopolos since at the period it was unmanageable to generate that percentage return level. Frank Casey introduces Markopolos to Thierry de la Villehuchet who affirmed on the percentage net of between one and two. Conversely, Villehuchet rebuffed identifying the manager attributed to the percentage on alleging that it will affect their business. The manager was Madoff who preferred to be anonymous to his clients. This was the first red flag to Markopolos. Secondly, the process became even suspicious when Bernie started to receive his profits on a split strike strategy. This is merely because the strategy has the capability of returning profits but only limited to short periods. This is evident in the book when Markopolos avers, “Numbers cannot lie, but people who create them can and do lie.” This was attributed to the fact that the market volatility made the strategy a great risk. This simply meant that the project was either a Ponzi or front running scheme (Markopolos 54).
Markopolos first submitted his finding to the Security Exchange Commission (SEC) when he realized that Madoff was managing and controlling about six billion dollars. This was above the hedge fund managers that existed in the United States by approximately two billion dollars. Markopolos confirms, “There is logic in Mathematics, but there is also the causal human element which has to be deliberated.” It was observable that Villehuchet had remitted two hundred million to Madoff. This was established with the help of Neil Chelo another quant financial analyst (Markopolos 64).
In May 2000, working as a team of three: Neil Chelo, Frank Casey and Markopolos, Markopolos (67) travelled to Boston to file his allegation to the Securities Exchange Commission. Nonetheless, the interview was a fail. The failure was credited to the fact that Markopolos was hosted by Grant Ward, the regional lawyer. Ward had extremely minimal knowledge on the issue making the presentation by Markopolos miss the mark. After the presentation, Markopolos chanced with Mike Ocrant. Ocrant presented the case of a manager he believed also generated the same returns on the investments. To Casey’s surprise Ocrant affirmed the manager to be Bernie Madoff. After joining the team Ocrant’s role was to write about Madoff.
Markopolos had to introduce a product that would counter the financial sell by Madoff. Markopolos assumed the role of a sales executive of the financial product after the death of George Devoe. After travelling to Britain to market the product it became apparent that majority of investors in Britain had invested with Madoff to terms of ten billion dollars.
In 2004, Markopolos realized that there were twenty cases of investors who had been swindled about twenty billion dollars through investments with Madoff. He decided to present again the case to the SEC under the bounty program. The SEC had the responsibility to assume interest in the case or present a bounty reward. Still, the case was turned down by SEC on the pretext that the financial market was aware of the market timing. Besides, they concluded that they were isolating it. In 2006, Markopolos realized that his presentation had led to investigation on the scam by Madoff despite the presentation being a rejected. According to Markopolos (160), he acclaims “I only have to outrun you.” This was simply to highlight the fear and spite in investors to outbound their investments in the Madoff scam.
Markopolos, (200), affirms the end of Madoff was unpredictable simply because the market where he reigned illegal crushed him coldly in 2008. It was soon manifested that the investment by Madoff was a sham Ponzi scheme when FBI joined the investigation. Markopolos, (202), states that the FBI asked Madoff if there was an innocent explanation for the scam. Madoff rejoined, “There is no innocent explanation.”
After, the collapse of Madoff, Markopolos and his team had the responsibility to expose the incompetent SEC. Markopolos affirms that while in an interview with the Inspector General of SEC he asked, “When you first made your submission what was Madoff estimate?” (241). Harry answered that he was estimated to be between three and seven billion. This simply meant that if SEC had acted in 2000 they would have saved up to forty three billion dollars.
There are several critically characters in the book. The characters include the following.
Harry Markopolos
He is the author of the book and story. This is chastely because the author presents the story in the book which depicts him as a one of the central character. Markopolos is determined to confirm his fears that Madoff investment was either a Ponzi or front runner scheme. This was credited to the unexplained net returns of one to two percent. The net returns were channeled to investors through a split strike strategy. He also exposes the Madoff and the rot in SEC with the help of his friends.
Bernie Madoff
Madoff is considered the principal character in the book. This is chiefly because the story revolves around him and his swindling activities. Madoff runs a Ponzi scheme that is masquerading as a financial investment firm. Madoff makes sure that remittances from unsuspecting investors are channeled to him in form of feeder funds. This guarantees that he remains anonymous to them.
Securities Exchange Commission
The SEC is also another vital character in the book. This is chiefly because SEC plays a focal role of making sure the tracks and frauds of Madoff are veiled. This is accredited to their ineptitude and corporation with Madoff. A compelling case of incompetence is palpable when Markopolos heads to present his findings to Ward. Ward: a regional lawyer for SEC fails to apprehend assertions presented on Madoff.
Frank Casey, Mike Ocrant and Neil Chelo
The three are an ultimate part in the revelations of the book. The three are part of Markopolos’ team. The team takes part in revealing Madoff. Frank Casey is a market representative for Markopolos. He takes part in initial establishment of Madoff scheme. Mike Ocrant is a financial analyst who is referred to as a “quant.” This simply means a financial analyst genius. He takes part in analyzing the sense behind high returns presented by Madoff firm. Finally, Ocrant plays the essential role of unveiling the mask of Madoff. He presents the crucial information that Markopolos uses to nail and seal the fate of Madoff.
Themes in the Book
The pivotal themes emphasized in the book include the following. The first theme is honest. Markopolos chiefly highlights the lack of honesty in financial market. This is ostensible where a single man in Wall Street swindles about one hundred billion dollars from unsuspected investors. This is apparent in the fraud that Bernie Madoff exposes the world through his Ponzi scheme (Markopolos 164). The second, vital theme is lack of government to protect people in financial market. This is marked when the SEC and government institutions fail to identify the scheme by Madoff which costs the investors heavily.
Evaluation of the Book
The most compelling issue that works in the book is the failure by government and its institutions to protect citizens in the financial market. It is obvious that the Securities Exchange Commission was charged with the responsibility of protecting financial investors from frauds such as Madoff scandal. Contrariwise, SEC plays a nominal role in protecting the investors. Markopolos in 2000 present the impossibility in Madoff’s returns on investments. However, the SEC rejects his presentations and subjects him to an ineffectual lawyer. Markopolos presents several times his findings which are rejected. This is until when it is too late when the magnitude of Madoff scandal is extreme. It is even ironical that SEC a financial system body is full of incompetent staff. This is evident in the case of Ward. Moreover, SEC fails to identify that Madoff’s building had an extra seventeen story where all the illegal swindling was fashioned. It is even startling when the government has investigative bodies such as FBI but do not identify the Ponzi scheme by Madoff. This is until Markopolos and his team unravels the scheme.
Another compelling issue in the book is the unethical environment typified with dishonest that is rooted in the financial market. Dishonesty in the financial market is depicted by two parties. The first party is Madoff financial institution. The second party is the Securities Exchange commission. Madoff was a trusted financial investor who went behind his trusted investors. He swindled innocent investors off their investments. Moreover, Madoff operated anonymously to his clients making it impossible for the clients to comprehend the source of their investments. It is also obvious that the ethical rot of dishonest is further emphasized by people such as Villehuche. Villehuche comfortably hides the identity of Madoff. SEC is an eminent body that is charged with the responsibilities of guaranteeing that financial investment in the United States is safe for investors. However, it is satirical that the body has employed unskilled staff who cannot protect the investors. This is marked by Ward and other staff who cannot make out the Ponzi scheme by Madoff despite Markopolos presenting sufficient evidence to implicate him.
The book is an exceptional masterpiece in comparison to other books of the same genre such as “Wealth, War and Wisdom.” This is merely because of its detailed findings on the case presented. Additionally, the book utilizes imperative terms in financial market. The book clearly appeals to my logic. This is attributed to the structuring and presentation by Harris Markopolos. Markopolos presents a detailed systematic occurrence of the events before the Ponzi scheme. This is achieved with the utilization of years, months and exact dates of the occurrence of the events.
Recommendation on the book
The book is a compelling masterpiece highlighting dishonesty and incompetence in the financial market that any person will find it cultivating to read. This is primarily because the author incorporates his real life into the complex financial market world. The assimilation makes sure that the bibliophile can easily read the book irrespective of their field of specialization. However, the utilization of extreme financial terms may make it a bit difficulty to comprehend it. The reader has to be prepared for a meticulous thriller that unravels the rot in the financial market. After, reading the book the themes presented will guarantee that the reader is more refined on the world of financial schemes and money.
Works Cited
Biggs, Barton. Wealth, War and Wisdom. John Wiley & Sons, 2008. Print.
Markopolos, Harry. No One Would Listen: A True Financial Thriller. Wiley, 2011. Print.
