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Wall Street Journal Book Review Unfairly Slams Harry Markopolos

Posted by Larry Doyle on March 9, 2010 12:04 PM |

People in glass houses should not throw stones.

That simple piece of wisdom is both timeless and precious. Regrettably, too many in our media fail to uphold it. Where do I see evidence of it today?

The Wall Street Journal today runs a book review of Harry Markopolos’ recently released No One Would Listen. The reviewer is Richard J. Tofel of ProPublica, a nonprofit investigative-journalism newsroom. Tofel does not denigrate Harry’s work, but he emasculates Harry from a personal standpoint.

Tofel writes:

A crusading legislator who had made a considerable reputation following up on whistleblower charges once told me that nearly all the whistleblowers she had met shared two qualities. First, they were onto something—that is, there was at least some truth to what they were saying. Second, they were “a little bit nuts.” The jacket of “No One Would Listen” identifies Harry Markopolos as “the Madoff Whistleblower.” He would seem to fit the pattern.

The author of “No One Would Listen” is fond of describing himself as “slightly eccentric,” but he is not exactly self-aware. By his account, the fault for his having been ignored throughout eight years of warnings is everyone else’s. But that conclusion requires ignoring much of his story.

The possibility of self-interest probably heightened the skepticism of those he sought to persuade.

Mr. Markopolos tells us that for years, fearing for his own and his family’s safety, he checked for bombs under his car; he also carried a loaded gun and slept with it at his bedside. He did so because he believed—though he offers no evidence—that Mr. Madoff’s clients included Russian mobsters and Latin drug cartels. Even after Mr. Madoff had been jailed, Mr. Markopolos, a longtime Army reservist, feared that the SEC would invade his home, eager to capture and suppress evidence of the agency’s failings: “I loaded a 12-gauge pump shotgun with double-ought buckshot, attached six more rounds to the stock, and draped a bandolier of 20 more rounds on top of my locked gun cabinet. Next I got out an old army gas mask in case they used tear gas.”

None of this behavior makes Mr. Markopolos’s case against Mr. Madoff any less convincing. Nor does it excuse the SEC. But it does provide a fuller picture of the author than the cardboard cut-out of the lonely hero we’ve been hearing about for the past 15 months. With his book, Mr. Markopolos sheds more light than he intends on just why no one would listen.

Why does Tofel slam Harry and paint him as being a nut? Tofel writes in self-defense because he worked for 15 years, including two years as assistant publisher (2002-2004), at The Wall Street Journal, one of the periodicals which failed to pursue the lead on the Madoff story.

I think The Wall Street Journal is an outstanding periodical, but it is hardly perfect. As further evidence of questionable and selective journalism, I would share with my readers that in January 2009 when I unearthed the fact that Wall Street’s self-regulator FINRA owned $647 million in auction-rate securities, I brought those details initially to The Wall Street Journal. After ten days to two weeks of conversation with representatives of the WSJ, for whatever reason they chose not to pursue the story.

I then brought the news to Bloomberg, and to its credit a reporter there pursued the story and broke it late last April including the fact that FINRA liquidated its ARS holdings in mid-2007.

I share that tidbit not to draw attention to Sense on Cents, but rather to highlight that the media needs to be more demanding of itself in upholding its charge to pursue truth, transparency, and integrity everywhere on our economic landscape.

I do not expect The Wall Street Journal, Bloomberg, Sense on Cents or ProPublica to be perfect, but they can be and should be a lot better than this slanderous drivel put forth by Mr. Tofel today.


Related Sense on Cents Commentary

Wall Street Journal Goes in the Tank for FINRA (September 25, 2009)

  • phil trupp

    While few if any editors at the WSJ will admit it, the truth is the newspaper is, almost by definition, a “trade journal.” It’s a pretty good trade journal, maybe the best in the U.S., but this doesn’t alter its character. The WSJ serves to promote and often protect the industry it represents. Its readership is not the paper’s first concern. It was professionally absurd to have turned down your FINRA beat. I have worked for newspapers that would have fired me for turning away your breakthrough story. Thankfully, hundreds of thousands of investors learned a shocking secret about auction rate securities, thanks to your hard work and research. Bloomberg did the right thing. They vetted your research and had the guts to publish a dynamite story. You should be proud. Keep in mind that Bloomberg isn’t a trade journal; it covers the globe, and its first and primary obligation is to its readership. WSJ–the name tells you exactly where its loyalties are invested.

    • John w

      Thanks so much again. I have emailed you personally as well.

      Please be sure to include E*Trade in your preface as worthy of the Olympic Fraud medal either gold/silver/bronze. To this very date they haven’t responded to its victims as to what they indend to do about redemption. They to this day, say “no comment, and not our problem.” Even though they SOLICITED hundreds of trades.

      IMO Schwab, E*trade, Oppenheimer are all in running for a place on the Podium.

      Wall Street Gold, (plated with zinc underneath

  • hongloan

    There’s no excuse for that slanderous article. The WSJ is just sour that Harry warned them about Madoff for three years, but they did nothing to expose the fraud. They missed sub-prime and they miss Madoff. You can tell whose allegiance they belong to.

  • HF

    The last sentence of Mr. Tofel’s review seems to imply that FINRA / SEC should ignore tips or complaints from people who are a tad eccentric. To quote from Tofel’s first paragraph: “…a little bit nuts.”

  • Peter Hill

    I just finished reading Markopolos’ excellent and disturbing book over the weekend, and this WSJ review is SAD. Markopolos held this story in front of the Journal’s face for three years, and they — not he — said no. Only when the Madoff story exploded onto the front pages of the rest of the world (the Journal’s competitors) did the Journal take Markopolos seriously. And even then, it was only to save their ass, politically. If the Journal’s review accomplishes anything, it is the ironic substantiation of Markopolos’ original point: no one listens.

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