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Comment by harikb | Hacker News Reader

Very interesting indeed..

> The stock borrow programme at the DTCC, they allege, enables the naked shorting of shares to the extent that the number of shares in circulation of some companies is now several times in excess of that issued. Even companies listed on the NYSE, could have been affected. As Wes Christian, partner in law firm Christian, Smith & Jewell in Houston, and lead lawyer on several of the cases, explains: "With the revelation of the Regulation SHO Threshold Securities list and the Leslie Boni report, published in November 2004 [see glossary], it is now crystal clear that this problem of naked short selling is systemic in Wall Street, and virtually impacts every business sector on every exchange including numerous billion-dollar companies listed on the NYSE and other companies listed on the Amex."

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When I was in PFG Marketer Services I saw million dollar double payout fuckups all the time and a shady SQL Server database for "manual over-rides" on commissions to brokers that seemed like an un-audited slush fund.

off topic, but I'm curious what would've been a typical workday there.

Someone reading that might be wanting to ask the same hoping to hear salacious "hookers and blow" Wolf of Wall Street legendary stories, but usually the reality is pretty mundane. Corruption is endemic to highly successful niche adaptations, but their yields rarely give rise to outlandish behavior. We see that a lot in breathless news stories, but that's just what sells ads.

Most corruption happens in a matter-of-fact, business-as-usual, we're-all-in-this-together atmosphere. And the proceeds don't usually lead to blowout lifestyle extravaganzas, as most participants are clever enough to realize that draws unwanted scrutiny. That is what makes corruption so insidious and difficult to root out. The rot spreads slowly, and inspection is commonly asymmetrically more difficult and costly to mount than undertaking the corruption act itself.

The most reliable way of rooting out corruption I've seen is an organizational culture that nurtures trust between leadership and organizational members, equitable gains sharing (so members feel they have skin in the game), and fiercely protecting whistleblowers (where the vast majority of human organizations utterly fail). Personally, Dunbar's Number appears to be some kind of (hopefully) local optimum but I'm curious how Geoffrey West's findings of scaling square with corruption incidence and scale.

Now dark about dark pools and see how far up we really are

In your opinion, what is sketchy about dark pools. I have a couple answers (pertaining to marketing, but not operations of the pool), but am curious about what the popular perception of these pools are.

Marketing? I'm very curious to see what you say.

Well for me, it's taking information flow off of the table. Not having access to the trade at execution (and how long it was an order) puts me at a disadvantage. I'd take the market impacts to have greater transparency.

Dark pools have deceptive marketing imo: to investors they advertise how no HFT ppl will be around to eat you alive while simultaneously giving a totally different presentation describing all the benefits of the dark pool to the HFT firms.

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