It seemed to be an open secret on Wall Street for years that Bernie Madoff was a fraud. No major Wall Street investments firm did business with him. Neither did any major derivatives firms. Executives in both fields looked at his numbers and concluded they couldn’t be real. One financial analyst went to the U.S. Securities and Exchange Commission and said there was no way Madoff was an honest broker.
Yet it wasn’t until Madoff’s Ponzi scheme had reached its limit and he confessed to his sons at the end of 2008 that he couldn’t pay his clients that he was finally arrested. One of his sons blew the whistle.
| On screen |
| ‘Chasing Madoff’ |
| » Rating: 3 out of 5 stars |
| » Starring: Harry Markopolos, Frank Casey |
| » Director: Jeff Prosserman |
| » Rated: Not rated |
| » Running time: 91 minutes |
“It took me five minutes to figure out,” that analyst says in the documentary “Chasing Madoff.” Yet for a decade after that, unwitting investors continued to be duped by the man who had at one time been chairman of NASDAQ. They lost billions of dollars because they didn’t know what so many of Madoff’s colleagues did. How could this possibly have happened?
“Chasing Madoff” doesn’t quite explain it. But perhaps no one could. How one man — at least, mostly one man — could conduct the biggest Ponzi scheme in history at a time when information spreads more easily than ever is a mystery that even Madoff himself might not be able to solve.
That analyst is Harry Markopolos, then an investor with the Boston-based firm Rampart Investment Management, whose Chairman Frank Casey also appears in the doc. Casey got ahold of Madoff’s numbers and had Markopolos take a look. He knew immediately that something was up. “It looked like nothing from finance I’d ever seen. Because the markets go up, then they go down,” he says. Madoff’s return streams were nothing short of miraculous. Casey didn’t seem to believe his underling at first, so Markopolos built mathematical models. He concluded, again, that Madoff’s returns were impossible.
Nearly a decade before Madoff’s arrest, in 1999, Markopolos took his mathematical proof to the SEC. No one, it seems, listened. (Hence the title of Markopolos’s book, “No One Would Listen.”) Perhaps Markopolos and his team should have gone straight to investors. Entire fortunes were lost to Madoff’s madness.
Of course, since the film is based on his work, Markopolos is the star. At times, the awe is a little over the top, as when Casey says admiringly, among other things, “He can make the numbers dance.”
“Chasing Madoff” is eye-opening. But it doesn’t give us a look at what we’d all really like: Madoff’s mind. He’ll spend the rest of his life in jail, while his victims will spend theirs wondering why they trusted him, how he could do this, and why he thought he could continue to get away with it.
