Harry Markopolos Knows What to Do About Off-Balance Sheet Accounting
“[E]liminate all use of off-balance sheet accounting–for any use whatsoever. Everything must be on balance sheet.”
~ Harry Markopolos, on one aspect of financial reform.
There’s a Very Good Reason Why Harry Markopolos Shouldn’t Be SEC Chairman
The man is a forensic sleuth, no question. Is he a hero? What’s a hero? Could he train young SEC grasshoppers to be fraud detecting machines like him? Probably. David Weidner — among others — isn’t enthused, especially with Harry’s idea about who should play him in a movie (Hanks, Damon, Cage).
And we’ll just go on record to say that we aren’t on board for Marks to take over either. Forget about our constant griping about the pipe dream that is accounting rule convergence and how HM’s input won’t likely amount to squat. That’s not what’s important.
What’s important to remember is that the man cannot control his bodily functions. As you may recall, the ACFE named Markopolos as their Fraud Examiner of the year and he spoke at their big to-do in Vegas where he admitted that he regularly soiled himself while investigating Bernie Madoff. This is unacceptable.
Look, maybe this isn’t a big deal for some of you but if the man wants to be in the big chair he can’t be changing his undies every couple of hours when he’s trying to crack a big case. Do you think Mary Schapiro has drawer full of extra VS? NO. WAY. So before you jump on the Marks bandwagon for the next Chair of Enforcing the Financial Universe, let’s not forget that when he gets nervous, he’ll be extra unpleasant to be around.
Quote of the Day: Harry Markopolos Had That Crazy Look in His Eye | 02.25.10
“If he contacted me and threatened me, I was going to drive down to New York and take him out. At that point it would have come down to him or me; it was as simple as that. The government would have forced me into it by failing to do its job, and failing to protect me. In that situation I felt I had no other options. I was going to kill him.”
~ Harry Markopolos, in his new book, on Bernie Madoff.
SEC Reminds Us of Past Mistakes; Arrests Madoff Associate
One day after it was reported that fraud detecting superman Harry Markopolos called the Commissioners “idiots” and Mary Schapiro “coldly polite” (that’s a compliment, isn’t it?) the SEC is charging another Madoff associate.
Today the Commission brought charges of “conspiracy, securities fraud, falsifying books and records of a broker-dealer, false filings with the U.S. Securities and Exchange Commission and filing false federal tax returns,” against Daniel Bonventre, according to several reports.
Bonventre was the master of making the internal accounting look legit, as opposed to lying to peoples’ faces directly. He was responsible for accounting entries that “[hid] the scope of the investment advisory operations and understating Madoff liabilities by billions of dollars.”
The Commission also brought civil charges against Bonventre, “alleging he helped disguise Madoff’s fraud and financial losses at Madoff’s firm by misusing and improperly recording investor money to create the false appearance of legitimate income.”
While the rest of the media focuses on the who, the what and the how long will that person be spending in FPMITA prison, “Dirty Diapers” Markopolos probably just wanted remind everyone that A) the SEC missed this by ignoring him several times and B) he still doesn’t think too highly of them. Oh, and he has a book coming out.
DOJ, SEC Announce Charges Against Madoff Exec Bonventre [Dow Jones via WSJ]
Madoff Aide Bonventre Becomes Sixth Charged in Fraud [Bloomberg BusinessWeek]
Madoff Whistleblower Slams Obama’s SEC: ‘They’re A Bunch Of Idiots There’ [HuffPo]