Whistle-blower still busy, but feeling less threatened

‘Chasing Madoff’ documentary now available as DVD

After months of publicly excoriating the nation’s top securities regulator for ignoring his tips on Bernard Madoff’s Ponzi scheme, Harry Markopolos had recently changed his tune.
John Tlumacki/Globe Staff
After months of publicly excoriating the nation’s top securities regulator for ignoring his tips on Bernard Madoff’s Ponzi scheme, Harry Markopolos had recently changed his tune.

Last September, when Harry Markopolos was enjoying a nationwide tour of screenings of the documentary on his Madoff-busting crusade, he received a coveted phone call. And it was not from a film critic.

It was from Mary Schapiro, the head of the Securities and Exchange Commission. “I thought I was going to get a tongue-lashing,’’ Markopolos recalled in a Globe interview. Instead, “She was effusive. She said thank you.’’

After months of publicly excoriating the nation’s top securities regulator for ignoring his tips on Bernard Madoff’s Ponzi scheme, Markopolos had recently changed his tune. He was citing improvements at the agency since the financial crisis and failures of the Madoff scandal had led to deep scrutiny and a major housecleaning.

The movie ‘‘Chasing Madoff’’ documents the work of whistle-blower Harry Markopolos.

It was a big moment for the determined and deeply paranoid whistle-blower, who feared for his life during his pursuit of Madoff from 2000 to 2008. These days, the paranoia has receded, though it is on full display in the film, “Chasing Madoff,’’ being released this week on DVD. After an intense period in the spotlight, testifying before Congress and traveling the country for speaking engagements, book signings, and movie discussions, Markopolos has been searching for his next big thing.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

Most recently Markopolos, 55, has taken on big banks and the arcane field of foreign exchange trading. He said he dipped his toe into some Medicare fraud allegations but decided he would rather stick to the finance field he knows so well. He said authorities have been looking into a case he gave them about a year ago that could become public in the near future. And he is about to embark on another new project that he would only describe as “on the Wall Street beat.’’

But he is not carrying around a pistol anymore, as he did after telling the SEC about Madoff, though in the newer cases, too, there are billions of dollars at stake, he said.

“I don’t think I have anything to worry about at all,’’ Markopolos said. “How violent are the banks?’’

Working from his home office in Whitman, Markopolos developed cases starting in 2006 with a group of whistle-blowers alleging that State Street Corp. of Boston and Bank of New York Mellon Corp. for years overcharged pensions and other large clients for currency trades. A Boston law firm, Thornton & Naumes, is representing the Markopolos foreign-exchange whistle-blowers across the country. The lawsuits have led to cases in several states brought by attorneys general and the Department of Justice.


Both banks are fighting the charges and deny wrongdoing. But Markopolos, data-driven and knee-deep in numbers, is insistent. The banks overcharged for currency trades, he alleges, because no one - including the big mutual funds they trade for - was paying attention. “We can’t have $4 trillion trading daily with nobody watching it,’’ he said.

Markopolos said he has been heartened by the response from regulators, including the SEC, in the foreign-exchange matters.

“I’ve been working some cases with them. I’m very pleased,’’ Markopolos said. “They know that the only path to salvation and restoring their reputation is in pursuing big cases.’’

There is potentially big money in these cases for people like Markopolos and the firsthand witnesses he recruits, under the provisions of the Dodd-Frank financial overhaul act. Its goal was to encourage company insiders to report wrongdoing, to head off financial disasters like the Madoff fraud and the mortgage securities scandal.

David Cosgrove, a St. Louis securities attorney who previously has worked in the Massachusetts attorney general’s office, said critics of the act had feared a “flash mob’’ of SEC prosecutions. So far that has not happened. But given the series of frauds from Enron and Madoff to subprime mortgages, Cosgrove said, “one could argue pretty persuasively that we need the whistle-blower program - and more.’’


Markopolos first told the Boston office of the SEC about Madoff’s scheme in 2000, but he was ignored. He was working for Rampart Investment Management, a firm that wanted him to help match Madoff’s returns. When Markopolos crunched the numbers, he found that Madoff’s claims were impossible.

The $65 billion scandal ensnared major US business people and philanthropists, notably Boston’s Carl Shapiro, whose family has given millions to Boston hospitals and museums. It also affected wealthy European families and Americans saving for retirement.

If the film tries too hard, with an over-dramatic soundtrack and images of blood-stained documents, it does capture the ordeal of a man trying to do the right thing, and imagining he would be killed for it.

“My undercover days are over,’’ a calmer Markopolos said. “I’m never going back.’’

In a twist of fate that disappointed the film’s producer, Jeff Prosserman, Hurricane Irene hit last August on the weekend “Chasing Madoff’’ debuted, and dampened box-office sales. He is hoping more people will catch the saga on DVD.

Beth Healy can be reached at