Thursday, November 04, 2010

No One Would Listen

I picked up No One Would Listen: A True Financial Thriller by Harry Markopolos with trepidation. I had heard about Bernie Madoff and the huge pyramid scheme he ran under the cover of a hedge fund. However, not being a financial guru, I wasn’t sure I’d be able to follow the story.

Markopolos does a very good job of focusing on the people involved in the Madoff scandal. Because of the subject matter, he does have to delve into the financial and investment world, but he does his best to simplify it for the average reader. I still don’t understand all the jargon surrounding investing or hedge funds, but that didn’t hinder my ability to understand the drama unfolding.

Markopolos is uniquely qualified to write a book on the Madoff scandal because he spotted Madoff as a fraud years before the pyramid scheme finally collapsed. He tried to warn the Securities & Exchange Commission (SEC) about Madoff more than a half-dozen times, but no one would listen to him.

The fall-out of the scandal is heart-breaking. Markopolos introduces us to several of the people he personally knew who lost millions and millions of dollars.

Since reading this book, I’ve read several articles in my local paper about people losing millions of dollars in locally-run hedge funds which turned out to be pyramid schemes. The lesson I’ve learned? Don’t invest in a hedge fund unless you can follow the money and the transactions.

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