Book Review: No One Would Listen

This is a book about Harry Markopolos, who is the author of this book.  He talks about how he attempted  for years to expose the fraud that was Bernie Madoff.

The book takes the following form (from my view of how the author sees it):

  • How he came to a quick conclusion that Bernie Madoff was a fraud.
  • How he tried to convince others of that view, especially those that were feeding more money to Madoff.
  • Two journalists took his side and wrote about Madoff in 2001 or so, but to no avail.
  • Trying to come up with a similar strategy that would work, though it would return much less than Madoff’s supposed returns, and finding few would invest in it.
  • Fruitless wranglings with the clueless SEC.
  • Finally, in 2009, Madoff blows up.
  • Vindicated, he talks to the media, Congress, and anyone who will listen.
  • He excoriates the toothless SEC, and proposes better ways to root out financial fraud.

That’s the book in a nutshell.  But stylistically, the book harps on how no one would listen.  Well, duh.  No one did listen, or the book would have been over sooner.

People are not Vulcans.  They aren’t logical.  Most don’t think; instead, they mimic.  “If it works for him, it will work for me also.”

That was the case with Madoff.  He maneuvered many sheep into position to be fleeced, and worse, they begged for the privilege to be his clients.

There were many red flags flying:

  • No independent custodian
  • No independent Trustee
  • Small Auditor, incapable of auditing such an enterprise.
  • Returns were too smooth for being so high.
  • The asset size was to large for the markets supposedly employed.
  • Even front-running profits would not be enough, were Madoff to do that.
  • No profit motive.  Other managers with lesser track records charged more.
  • Marketing was by invitation.
  • Investors were sworn to secrecy.
  • And more, read the book.

Markopolos saw all of this, and ten years before it all blew.  All that said, I came away less than fully impressed with Harry Markopolos.  When I counsel people in trouble, I often tell them, “Don’t let the one who troubles you define your life.  You should be living for more than to see the one who troubles you punished.”  Markopolos triumphed here; good for him.  But many people in similar situations become fixated on seeing the enemy punished, and ruin their lives, focusing on punishing another, rather than doing good themselves.  There is a proper humility that should come to many of us when we can’t prove something beyond a shadow of a doubt, where we must give up.

My view is that Markopolos should have given up earlier, even though he succeeded in the end.  I have known too many people who have destroyed their lives on similar quests.  Good for Harry that he succeeded, but it was more likely that he would have ended up destroying his life.

And do I need more proof than that he had a plan to kill Madoff if Madoff threatened to kill him?  Throughout the book, there is no indication that Madoff would try to kill his enemies.

This was a book that needed a strong editor.  Much as I liked it because I appreciated the tale of the rise and fall of Madoff, someone needed to grab control of the narrative, and make it less personal for Mr. Markopolos.

Then again, if that had happened, the book would have been better written, but less colorful.  Hearing the off-color remarks of Mr. Markopolos is entertaining, if off-key.

With all that I have said here, I strongly recommend the book.  The best part of the book, though the least graphic, is the last chapter, where he recommends solutions, all of which I think make eminent sense.

If you want to buy the book, you can buy it here:  No One Would Listen: A True Financial Thriller

Who would benefit from this book

Most average investors could benefit from the book.  What it would point out to them is that if something seems to good to be true, it usually is, and that they should do their own due diligence.

Full disclosure: The publisher e-mailed me, and I requested a copy, if they had an extra one.

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