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Comment by qweiop | Hacker News Reader

I remember reading about dark pools and asking a friend in finance if the sector really is as corrupt as it sounds, his reply? "Oh much more"

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The only reaction more adverse than the one you get asking coders about remote voting is the one you get asking finance people about transparency and anticorruption. It's an open secret at this point that any effort that would weed out a significant proportion of the fraud would cripple our finance sector overall just because everyone who runs it would be in prison.

it's more like because governments have started to try to assign criminal liability to seniormost execs, not just to the people responsible. this is a response to the wink-and-nod cases that do exist but glaringly fails to account for the complexity and scope of large financial institutions and the fact that the guy at the top can't always supervise everything personally.

i don't know who you're talking to but no, it's not that criminal. it may be "corrupt" in the sense of rent-seeking or recapture-heavy institutions. it may be "corrupt" in the sense that your average IB analyst knows he's pulling long hours to churn out reams of 80% BS. it may be "corrupt" in that the VP at a PE fund knows that 7 turns of leverage and an inflated multiple for this middle-market shitco isn't actually a good buy. but there are a lot of honest people, enough that you can choose to do business with the same.

> it's more like because governments have started to try to assign criminal liability to seniormost execs, not just to the people responsible.

seniormost execs exist to be the people who are responsible. They get the big bucks because they're supposed to be accountable for everything that goes on under their watch.

If they don't want the liability, or can't actually supervise sufficiently to prevent crime, then they shouldn't accept the job. If they want to take the paychecks and golden parachutes, they can also take the prison sentences.

BS. they exist to accept some level of responsibility but it's impossible to make them anything except scapegoats in orgs of a certain scale. if you disagree, you are either misinformed or simply hate them and want an excuse to jail them.

do you know how many managing directors JPMC has? this is just one bank and we're talking about a very senior position, half-a-million-a-year base salary sort of seinor. they have around 1,600. it is impossible for one person to manually oversee even what's a pretty high-level position with many direct and indirect reports. impossible to manage this without trusting subordinates.

it sounds like you are motivated more by schadenfreude or malice towards these people because of "paychecks and golden parachutes". this isn't a good-faith position or a reasonable policy.

top executives are responsible when the company makes a profit. maybe they should be responsible when the company commits a crime. if they can't be responsible when the company commits a crime, how do they justify being primarily responsible when the company does well?

they are responsible when a company makes a profit or a loss. that's a pretty fair trade-off. the core difference is you can't attribute a profit or loss solely to one person, not hardly ever. you can, however, attribute criminal activity to a certain number of people, because it's very tightly defined. you can't just calculate the EV of every action the same way.

If you want to know information before the public knows it (like the interest rate adjustment) go to a Wall St. bar and ask a trader. None of them are supposed to know that. They all do (unless they don't go out or talk to friends), and they trade based off of that information.

Back in the day when I was day trading in a firm, dark pool was pretty much the only place that I could offload some stocks quicly when they went the other way. It was pricey though so we were told to use it as a last resort.

I worked for an investment bank and on the inside no one even pretends, it's just a part of the job.

I used to be friends with some finance guys around 2008 and they told me the same thing. Retail investors are basically suckers to them who can be exploited.

How'd their 2008 go?

Great! The taxpayers gave them a lot of money.

Most informed “dark pools” comment

Did he elaborate on this?

Goldman and others got in trouble for selling access to the supposedly secret orders in their dark pools back in the day.

They were fined 800k I think?

I believe dark pools started growing post flashboys when people realising what hft meant and wanted an escape (see comment below). But as they got big they became a target in and of themselves (ecology in action I guess).

I worked in algo trading at the time (not hft, but anti hft)

Dark pools started in the 1980s once the SEC permitted securities to be traded off the exchange they are listed on. I think that was well before flashboys.

I had no idea they went that far back? Good knowledge!

Dark Pools were the original "equitable market"; when market makers were trading in 1/8ths and fixing markets, dark pools enabled people to trade in 0.01 increments.

And then they found that some of the liquidity in dark pools was by dark HFT.

Funny, I got the same answer from my neighbor when I asked him how much the NSA satellites can see.

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