In conversation with Harry Markopolos, the guy who went after Bernie Madoff

More specifically, the guy who had the goods on the billion-dollar swindler for years before the Ponzi scheme finally fell apart. Too bad the SEC didn't follow up on any of the leads that Markopolos provided. But last night he received a standing ovation at the Museum of Tolerance following a screening of the documentary "Chasing Madoff" (opening in L.A. and NY this Friday). The film is about the travails of Markopolos and his investigative team in trying to build a case against Madoff. Sadly, Markopolos was never successful - Madoff's fall was his own doing, the result of a sour economy that resulted in more investors requesting more amounts of cash that Madoff couldn't accommodate (as with any Ponzi schemer, he relied on new investors - and their money - to pay off the old investors).

"Chasing Madoff" has a lot of dark edges, but in places you might not expect. After years of sleuthing, Markopolos became so concerned that someone would try to knock him off - perhaps Columbian drug dealers, perhaps Russian mob types - that he bought an arsenal of weapons, checked the underside of his car each day for explosives, and made contingency plans in the event that he ever met Madoff face-to-face. But during our Q&A following the film, he told me that he never received actual threats. Markopolos is an odd duck - even as he broad-brushes a conspiratorial picture on much of the government and financial systems, he's often funny, in a glib and goofy sort of way. He's also really smart - perhaps too much for his own good. John Coffee, a prominent law professor at Columbia Law School, called him "an emotionally unstable idiot savant," which is how many Wall Street types still view him - and I'm guessing that the movie will only affirm that opinion. (The trailer below is a sample of the film's unnecessary hyperbole.)

I tried sorting out his motivations for not giving up on the Madoff investigation, but he didn't make it easy. If you've seen Markopolos being interviewed, you know that his answers tend to be short, clipped, and not always in direct response to the questions. Towards the end of the evening, he did acknowledge that the SEC has started to get its act together - and that their people are now very helpful to him. I wonder why.