Over a decade ago I worked as a freelancer for an Investment Bank (the largest one that went bankrupt in the 2008 Crash, which was a few years later) were the head of the Proprietary Trading Desk (the team of Traders who invest for the profit of the bank) asked me if I could change the software so that they could see the investments of the Client Trading Desk (who invest for clients with client money) was making, with the assent of the latter team.
Now if the guys investing money for the bank know what they guys investing customer money are doing they can do things like Front-Run the customer trades (or serve them at exactly the right price to barelly beat the competiotion) thus making more profits for the bank and hence get bigger bonuses. This is why Financial regulations say that there is supposed to be so-called Chinese Walls between the proprietary trading and the customer trading activities: they’re supposed to be segregated and not visible to each other.
Note that the heads of both teams were mates and already regularly had chats, so they might already have been exchanging this info informally.
I was quite fresh in there (less than 1 year) and the software system I worked in at the time was used by both teams, but when I started looking into it I saw that the separation was very explicitly coded in software and that got me thinking about what I had learned from the mandatory compliance training I had done when I first joined (so, yeah, that stuff is not totally useless!!!)
So I asked for written confirmation from the heads of both teams, and just got some vague response e-mails, no clear “do such and such”.
So I played the fool and took it to a seperate team called Compliance (responsible for compliance with financial regulations) saying I just wanted to make sure it was all prim and proper, “just in case”.
Of course, it kinda blew up (locally) and I ended up called to a meeting with the heads of the Prop Desk and whatnot, were I kept playing the fool and it ended up not being a problem for me at all.
As a side note, after that bank went bust its component parts were sold to another bank and I was asked back to work with the same IT group (remember, I was a freelancer) with even greater responsabilities, so this didn’t exactly damage my career. That said, over the years there were various cases of IT guys in large investment banks who went along with “innocent” requests from the Traders and ended up as the fall-guys serving jail time, so had I gone along with that request I would’ve actually risked ending up in jail.
(That said, Financial Regulators were and are a complete total joke when it comes to large banks).
This is your friendly reminder that the only person who went to jail for the diesel gate is the software developer who implemented the test-cheating practice. Not the managers, the directors who asked for it or anybody else
If there’s one thing being a decade in Finance, including through the 2008 Crash, plus the pondering all about what happenned before, during and after 2008, and looking at all those situations with a much more informed eye since, is that in the present day most Regulators aren’t there for the good of citizens, they’re there for the good for A/The System, which is invariably dominated by and useful for but a tiny subset of people.
For example, the UK’s Financial Regulator is tasked with “Maintaining the stability of the markets” and the way they interpret their mandate is such that their reaction to Market abuses by any large player is to cover it up at any cost: a thoroughly rigged Market were there most market players are not in the know is more stable than a genuinelly Free Market properly watched over to remain so and were large market players are punished if they try to rig the market.
Whilst Finance is maybe the worst in this regard, anywhere there are large wealthy companies (often having a veritable revolving door of heads between them and the Regulator) with politically influence and deemed Economically Important (in Finance they’re called “Too Big To Fail”) the Regulator will protect them and their leaders, often by finding scapegoats, and do so even against the best interests of citizens in general.
Over a decade ago I worked as a freelancer for an Investment Bank (the largest one that went bankrupt in the 2008 Crash, which was a few years later) were the head of the Proprietary Trading Desk (the team of Traders who invest for the profit of the bank) asked me if I could change the software so that they could see the investments of the Client Trading Desk (who invest for clients with client money) was making, with the assent of the latter team.
Now if the guys investing money for the bank know what they guys investing customer money are doing they can do things like Front-Run the customer trades (or serve them at exactly the right price to barelly beat the competiotion) thus making more profits for the bank and hence get bigger bonuses. This is why Financial regulations say that there is supposed to be so-called Chinese Walls between the proprietary trading and the customer trading activities: they’re supposed to be segregated and not visible to each other.
Note that the heads of both teams were mates and already regularly had chats, so they might already have been exchanging this info informally.
I was quite fresh in there (less than 1 year) and the software system I worked in at the time was used by both teams, but when I started looking into it I saw that the separation was very explicitly coded in software and that got me thinking about what I had learned from the mandatory compliance training I had done when I first joined (so, yeah, that stuff is not totally useless!!!)
So I asked for written confirmation from the heads of both teams, and just got some vague response e-mails, no clear “do such and such”.
So I played the fool and took it to a seperate team called Compliance (responsible for compliance with financial regulations) saying I just wanted to make sure it was all prim and proper, “just in case”.
Of course, it kinda blew up (locally) and I ended up called to a meeting with the heads of the Prop Desk and whatnot, were I kept playing the fool and it ended up not being a problem for me at all.
As a side note, after that bank went bust its component parts were sold to another bank and I was asked back to work with the same IT group (remember, I was a freelancer) with even greater responsabilities, so this didn’t exactly damage my career. That said, over the years there were various cases of IT guys in large investment banks who went along with “innocent” requests from the Traders and ended up as the fall-guys serving jail time, so had I gone along with that request I would’ve actually risked ending up in jail.
(That said, Financial Regulators were and are a complete total joke when it comes to large banks).
This is your friendly reminder that the only person who went to jail for the diesel gate is the software developer who implemented the test-cheating practice. Not the managers, the directors who asked for it or anybody else
If there’s one thing being a decade in Finance, including through the 2008 Crash, plus the pondering all about what happenned before, during and after 2008, and looking at all those situations with a much more informed eye since, is that in the present day most Regulators aren’t there for the good of citizens, they’re there for the good for A/The System, which is invariably dominated by and useful for but a tiny subset of people.
For example, the UK’s Financial Regulator is tasked with “Maintaining the stability of the markets” and the way they interpret their mandate is such that their reaction to Market abuses by any large player is to cover it up at any cost: a thoroughly rigged Market were there most market players are not in the know is more stable than a genuinelly Free Market properly watched over to remain so and were large market players are punished if they try to rig the market.
Whilst Finance is maybe the worst in this regard, anywhere there are large wealthy companies (often having a veritable revolving door of heads between them and the Regulator) with politically influence and deemed Economically Important (in Finance they’re called “Too Big To Fail”) the Regulator will protect them and their leaders, often by finding scapegoats, and do so even against the best interests of citizens in general.