The Underlying Human Element | Harry Markopolos, 2010

 Harry Markopolos 


“Certainly one of the most important things I learned is that numbers can be deceiving.
There is a logic to mathematics, but there is also the underlying human element that must
be considered. Numbers can't lie, but the people who create those numbers can and do. As
so many people have learned, forgetting to include human nature in an equation can
be devastating.” 

“ Securities and Exchange Commission audits consisted primarily of confirming that a
checklist of documents existed, not necessarily that these documents were accurate,
 not even that they reflected real trades—just that you had the proper papers in your files.” 

“Ponzi schemes exist in stable disequilibrium. This means that while they can’t ultimately
 succeed, they can persist indefinitely—until they don’t.” 

“Most lawyers couldn’t recognize a Ponzi scheme if they were
having dinner with Charles Ponzi.” 

“Government has coddled, accepted, and ignored white collar crime for too long. It is time
the nation woke up and realized that it's not the armed robbers or drug dealers who cause the
 most economic harm, it's the white collar criminals living in the most expensive homes who
have the most impressive resumes who harm us the most. They steal our pensions, bankrupt
our companies, and destroy thousands of jobs, ruining countless lives.” 

“These guys, they work for five years at the Commission, then they become a compliance
manager at a hedge fund.” And, he added, he knew that was true because every time an SEC
 investigator came up to his office he or she would ask for an employment application.” 

“Forgetting to include human nature in an equation can be devastating.”  

“The health care industry makes Wall Street look honest. It’s a $2-trillion-a-year business
with no controls and with limited auditing. On Wall Street the crooks at least have the decency
 to try to hide their frauds, but those people cheating Medicare don’t even bother doing that.
Wall Street is only taking your life savings, but in health care they may be stealing your life.
I was surprised to discover how little “care” there is in health care.” 

“I believe half of what they teach students will be obsolete within five years and
the other half is just outright false.” 

“Every mathematician loves the hunt for the sour numbers in an equation.” 


Harry Markopolos, No One Would Listen: A True Financial Thriller, 2010 


A whistleblower is a person who exposes any kind of information or activity that is deemed
illegal, unethical, or not correct within an organization that is either private or public. The
 information of alleged wrongdoing can be classified in many ways: violation of company
 policy/rules, law, regulation, or threat to public interest/national security, as well as fraud,
 and corruption.

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors 
with funds from more recent investors. The scheme leads victims to believe that profits are 
coming from product sales or other means, and they remain unaware that other investors 
are the source of funds.


Harry Markopolos


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