Letter to SEC in 2005: "Madoff is running a Ponzi scheme"

The Wall Street Journal published the original submission to the SEC by analyst Harry Markopolos in 2005, following his claims of 1999 that Bernie Madoff was running a Ponzi scheme.

A few highlights:

"I am the original source for the information presented herein having first presented my rationale, both verbally and in writing, to the SEC's Boston office in May, 1999 ...

"I am a derivatives expert and have traded or assisted in the trading of several billion $US in options strategies for hedge funds and institutional clients. I have experience managing split strike conversion products both using index options and using individual stock options, both with and without index puts. Very few people in the world have the mathematical background needed to manage these types of products but I am one of them ...

"Madoff Securities is the world's largest Ponzi Scheme. In this case there is no SEC reward payment due the whistle-blower so basically I'm turning this case in because it's the right thing to do. Far better that the SEC is proactive in shutting down a Ponzi Scheme of this size rather than reactive."

Harry the hero?

SEC in the dock?

The day of reckoning cometh.

You can download the full submission (1.5 MB).