MARY: Between the two of you, how many people on Wall Street, professionals who had an idea that his strategy could not possibly have delivered these types of returns, how many people told you, "Oh yeah, we know Madoff is a fraud?"

HARRY MARKOPOLOS: Many dozens. We warned many people. If you look at who the victims were not, in Boston and in New York, in the financial center, it was the big firms in our two cities.

FRANK CASEY: You know, everyone I met on Wall Street that was senior or would have had, would have been a risk manager or had a responsibility of due diligence on a manager like a Bernie Madoff I would ask the question eventually, "What do you know about Bernie?" You never had to use the man's last name. Everybody knew exactly what you were talking about.

And so and they would always say, "Well, what do you know about Bernie?" Because they wanted more information than they were going to give you. And so, I would say, "Well, seems like a lot of people who understand risk analysis say this is not a market-driven rate of return. It doesn't come from the stock market. Therefore, it's coming from something else."

And then you would see the wink-wink, nod-nod. And it would be, "Well, he's probably front-running and trading against his book, using the capital as to finance and leverage up his broker-dealer or whatever, as a market maker." And then they would just say, "But not my problem."

MARY THOMPSON: Do you think they're to blame, too? I mean, in your book, you lay the blame fairly squarely at the feet of the S.E.C. But does the prof, the Wall Street community have a responsibility here?

HARRY MARKOPOLOS: They should have gone to the regulators and reinforced our story. People were afraid of Madoff.

FRANK CASEY: Sure.

HARRY MARKOPOLOS: We had career risk and possibly more risk than that. He had plenty of people making excuses for him, whether they were his clients or his friends or whatever

FRANK CASEY: Apologists. Uh-huh.

MARY THOMPSON: what was the most ridiculous explanation that you heard from someone, trying to explain how Bernie got his returns?

HARRY MARKOPOLOS: Oh, that's easy.

FRANK CASEY: Yeah.

HARRY MARKOPOLOS: He has perfect foreknowledge of the capital markets, because he sees his order flows and he knows exactly which stocks are gonna go up and when before they go up and same for down. And that's beyond ridiculous. Sure, he had five to ten percent of the daily volume on the New York Stock Exchange. But still, he doesn't know what the other 90 to 95 percent of the customers are doing.

He has no perfect foreknowledge. That was the dumbest excuse that I've ever heard in my life. I can't believe people are that naive. And they hold themselves out as fiduciaries with long-standing experience, conducting extensive due diligence. It was nothing but lies. None of that due diligence was ever conducted. These people were nothing but human predators. They were aiders and abettors to Madoff. They were part of the scheme.

MARY THOMPSON: You know, during your investigation, you actually went up to someone or an aide of someone who you thought really had the fight in them, that being the former governor of New York, the former attorney general of New York, Eliot Spitzer. And at that moment, he was presenting in Boston. And you put the documents that you had given to the S.E.C. in an envelope in another envelope.

Then you took one of your biggest overcoats, you put on gloves and you presented it to an aide. You took out your name, everything. And you said, "Please give this to Mr. Spitzer." And retrospect, should you have gone up to him in person?

HARRY MARKOPOLOS: I had twin boys about to be born a few months later, and I was so worried for my safety. I have regrets. I wished I had confronted Mr. Spitzer personally, told him, "I'm president for the Security Analysts Society. I've got 4,000 members. I'm highly respected in this investment community. These are my documents. I have proof that Madoff's a fraud, meet with me. It's the, it's the biggest case in history, it'll make your career." If I had said that, this case could have turned out far differently. That's a big regret for me.