By David Weidner

(Dow Jones) Harry Markopolos is finally taking his victory lap. Out hustling a new book about his nearly decade-long pursuit of Bernie Madoff, he's been on a whirlwind media tour: CNBC, MSNBC and "The Daily Show with Jon Stewart."

Markopolos finally seems relaxed and at peace. Madoff is in jail. The Feds are closing in on his accomplices. Markopolos clearly is having some fun. After being ignored for so long, he's finally the center of attention--on his terms.

But even with his crusade against Madoff behind him, part of Markopolos, 53 years old, is still burning. He says the Securities and Exchange Commission, which rebuffed him for so many years, is improving under its new chairman, Mary Schapiro, but largely remains broken. Investors, for the most part, are still unprotected, Markopolos said.

Given Markopolos's record and the new momentum in Washington for reform, it's worth revisiting a question put to him by U.S. Rep. Michael Capuano, (D., Mass.) during his Feb. 4, 2009, appearance before the House Financial Services Committee: Would he be willing to lead a whistleblower program at the SEC?

At the time, Markopolos said he couldn't because of his family commitments. But his twin boys are school age and his third child turns four this year. The book is out. Would Markopolos reconsider?

"If they wanted me to be chairman of the SEC, I would do it," Markopolos said in an interview. "If they wanted me to be chairman of a super regulator, I would do it. I know where the skeletons are buried on Wall Street. I know how to dig them up and I know how to attract and recruit talented finance professionals and incentivize them."

'Idiot Savant'

This is a crazy idea for a lot of reasons.

Markopolos burst onto the national scene a year ago after Madoff was turned in to authorities. The bookish former fund manager and U.S. Army Reservist waged a nearly decade-long campaign to expose Madoff. He eventually was called to testify before Congress about how the SEC turned a deaf ear to his evidence.

Besides writing his book, Markopolos has focused in recent years on uncovering fraud, helping potential whistleblowers come forward and working with prosecutors, but that's where the agreement about him ends.

Markopolos has issues. Critics say he's self-righteous and a little bit crazy. In his book, "No One Would Listen," Markopolos describes how he armed himself should he ever meet Madoff face-to-face. He fortified his home for what he thought was the very real possibility the SEC would send a team to suppress evidence that it knew about Madoff through Markopolos's efforts to expose him.

There's also a bit of an ego issue with him. When I asked him who should play him in a movie, Markopolos named a few actors including Tom Hanks, Matt Damon and Nicolas Cage, who played the nerdy professor in the "National Treasure" series of movies.

Markopolos also lacks support. For as much as he's lauded for his pursuit of Madoff, many find him a boor and, they argue, he'd be overmatched in such a high position.

"He is what the commission needs only if the commission needs an emotionally unstable idiot savant," said John Coffee, securities law professor at Columbia Law School. "You cannot be serious. He was right but that does not mean he will be right again."

Harvey Pitt, the former SEC chairman whose term was marked with controversy, scoffed at the notion of Markopolos running the SEC.

"I suppose his comment proves that hell hath no fury like a whistleblower scorned," Pitt said. "Actually, the last time I looked, the job was filled, and its current occupant, Mary Schapiro, was doing a terrific job."

The Terminator

It's true that Markopolos has his detractors, but it's also true that many of those quick to sneer at the idea of him atop the SEC agree that the commission is in a state of disrepair. It's overstaffed in some areas and undertrained in others. The best thing the SEC could do right now is fire most of its lawyers. Markopolos would be glad to do it.

"I'd go through the place like the Terminator," he said.

Many of his critics also agree with his observation that the SEC lacks enough investigators on the ground. He wants to bolster the SEC's forensic accounting ranks. "I can train them," he said.

Markopolos isn't just concerned with fraud either. He believes the industry has put people at risk with off-balance sheet investments and special-purpose vehicles. The markets, he says, are far too overrun with high-frequency traders who have an advantage over traditional investors.

He also believes complex derivatives have a place, but that so-called sophisticated investors too often don't know what they're buying and are often wooed by Wall Street sales pitches touting returns while glossing over risk.

And not everyone thinks Give 'em Hell Harry is a ridiculous choice. Robert Heim, a former SEC assistant regional director now in private practice, thinks Markopolos is right when he argues for more quantitative muscle at the SEC. Heim considers Markopolos a viable candidate for the job.

"Markopolos has shown the ability to root out frauds and Ponzi schemes that are hidden," Heim said. "He would still have to demonstrate broader knowledge of the financial markets, but it's not something to dismiss out of hand."

For its part, the SEC pointed out multiple reforms it has instituted in the wake of the Madoff case. It has hired a new enforcement chief, beefed up its handling of tips, made it easier for whistleblowers, added training for examiners and staff.

Yet, for all of the reforms put forth by Schapiro at the SEC--from the uptick rule to aggressive pursuit of insider trading--the public remains mostly unimpressed. Only 31% of respondents said they trusted Wall Street in a recent Zogby Interactive Survey, less than banks, less than corporations, less than the government and less than half of the 73% who said they trusted their local bank.

At the same time, Markopolos has won a populist following. There are multiple Facebook fan pages including one that wants to draft him for the SEC job. His book, released March 2, is the No. 1 finance and investing book on Inc. (AMZN) and ranks No. 20 overall.

When compared to the current or previous SEC chairs, Markopolos might be a risky bet, but given the SEC's failures in policing Wall Street, catching Ponzi schemers and making the markets safe, we're too far behind in the game to play passively.

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