WASHINGTON (Reuters) - Harry Markopolos, a former financial executive who tried to blow the whistle on accused swindler Bernard Madoff, will tell lawmakers he feared for the safety of his family when U.S. securities regulators ignored evidence in the case, the Wall Street Journal reported on Tuesday.
Markopolos is scheduled to testify on Wednesday at a House Financial Services subcommittee hearing that is examining how to reform U.S. financial services regulation and better police the markets.
“There was an abject failure by the regulatory agencies we entrust as our watchdog,” according to a copy of Markopolos’ testimony, which was posted on the Journal’s website. Markopolos said he gave evidence to the SEC’s office in Boston beginning in 2000 and resubmitted the evidence several times over a period of nine years.
“Because nothing was done, I became fearful for the safety of my family until the SEC finally acknowledged, after Madoff had been arrested, that it had received credible evidence of Madoff’s Ponzi scheme several years earlier,” the testimony said.
Markopolos and Madoff were Wall Street competitors when Markopolos was the former chief investment officer of Rampart Investment Management. Markopolos said he began looking at Madoff in 1996 after his boss at Rampart asked him to figure out how to match the returns of Madoff’s firm. Markopolos’ analysis convinced him it was impossible for Madoff to consistently outperform the markets.
Reporting by Julie Vorman; Editing by Andre Grenon