The biggest mystery of the Bernie Madoff scandal is why government regulators ignored more than a decade of warnings from a Boston portfolio manager: Harry Markopolos studied the uncannily consistent investment returns from Madoff’s investment firm and quickly concluded they could only come from a Ponzi scheme.
Even after the whistleblower sparked exposés questioning Madoff’s methods in Institutional Investor and Barrons, greedy investors continued to line up for too-good-to-be-true profits — generated by a constant stream of new suckers paying off older investors for nonexistent stock trades.
Much harder to understand is the Federal Trade Commission’s refusal to take action until the 2008 market crash finally left Madoff unable to perpetuate his fraud, which had reached something like $50 billion after two decades.
As Markopolos admits in Jeff Prosserman’s unenlightening documentary “Chasing Madoff,” nothing he or his associates did actually led Madoff to confess his epic crime. Only a dozen of his many worldwide associates have been arrested and a handful of FTC officials resigned.
There’s no real explanation for this in the documentary, which jazzes up its talking heads with some of the cheesiest re-creations this side of E!’s “Hollywood True Story.” Markopolos repeatedly tells us he was scared for his life — accompanied by hokey archival clips and music — though nothing actually happened to him.