The Business Ethics Blog

The documentary Chasing Madoff opens this week. I had a chance to attend a preview of the movie last night (courtesy of eOne Films).

The film is really the story of fraud investigator Harry Markopolos, the guy who, while working as an options trader at Rampart Investment Management, discovered Madoff’s scheme and worked valiantly to get the Securities and Exchange Commission to take notice.

It’s kind of a fun film, but not a great film. The film lacks a narrator, opting instead to tell the entire story through the first-hand accounts of a handful of people (primarily Markopolos and a couple of colleagues, along with a few of Madoff’s victims) and snippets from newscasts. The focus on first-person accounts gives the film a personal feel, but it also inevitably means a perspective that is slanted, though perhaps not fatally so.

There are a few laughs in the film. Markopolos is a bit of a strange cat. He’s a likeable guy, and apparently a man of integrity, but also a bit paranoid-sounding. On-screen, he tells us that he feared Madoff so much that he was ready to pre-emptively shoot the guy, if Madoff had discovered his investigation. He also describes what his strategy would be in the event of an armed standoff with the SEC, should they ever come to his home to get his files — files that included damning evidence of SEC complacency. Just for emphasis, one scene shows him leaning against his desk, brandishing a pump-action shotgun. These humourous parts are, I think, intentional, or at least surely the director (Jeff Prosserman) must have known they would spark laughter. And humour is fine, but it tends to undercut the filmmakers’ stated intention of generating outrage in their audience.

What’s most striking, perhaps, about Chasing Madoff is what it doesn’t tell us about the Madoff scandal. For example, it points fingers at the SEC, but tells us nothing about the agency’s funding levels, and whether it had the capacity to keep up with complaints like Markopolos’s as they flowed in. There are also allegations that “someone higher up” at the Wall Street Journal tried to stifle the story before it broke, but little evidence to back that up. And there are intriguing hints about the large number of individuals and organizations that must have been complicit in Madoff’s crimes, and hints at why they had no economic incentive not to keep putting faith in his results. There’s even a claim that Madoff “paid top dollar” to those that would bring him “new victims.” But the relevant parties are not named and the film makes little effort to explain the connections.

Bottom line: I’m a university professor — would I show this movie in my Business Ethics classroom? Probably not. It’s a fine portrayal of man of integrity fighting the good fight, but it teaches relatively little about how the financial crime of the century happened, or what if anything would prevent it from happening again.