
Spy Software Gets a Second Life on Wall Street - jackgavigan
http://www.wsj.com/articles/spy-software-gets-a-second-life-on-wall-street-1438541720
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notacoward
I love the part about the software being able to "predict" trouble at Enron
when fed a bunch of email from that era. Just like everyone and their brother
has come up with an algorithm that can "predict" past movements in the stock
market, but every single one of them has trouble predicting the actual future.
Folks on Wall Street, of all places, should be wary of people who present such
"evidence" of their algorithm's efficacy.

~~~
jfoutz
Wall street has 2 parts. First, there's the efficient allocation of resources.
There are a few people that consistently make money, like Warren Buffet. But
they play on very small edges. Sorta like poker, they consistently come out a
few percent ahead of the competition. But there's terrible variance. Is this
likely to be a tool that gives real market insight? No.

The other part of Wall Street is like matthew mcconaughey in the wolf of wall
street. It's getting people's money in the circus. Go around and around the
ferris wheel again and again. This is the sort of thing that can convince
people to invest.

I seriously doubt i'd put my own money in just because of this. But people
like that exist, and really, they're probably better off with some money in
stocks. They'll get a better return than a savings account. So, some people
will do the right thing for the wrong reasons.

Of course, everyone needs to be cautious of pure snake oil, but a respectable
company putting on a little sideshow from time to time is pretty reasonable.

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chollida1
Come on guys. So many negative quotes about wall street from people here who
didn't even bother to read the article.

The article discusses the use of software to catch rouge employee's before
they can do any harm and somehow this gets translated to anti wall street
comments?

Having said that, the article itself is garbage, its a submarine piece for a
Tennessee based ML company that doesn't really provide any real insight to
this world and what they do.

~~~
bcg1
Peoples' frustration has nothing to do with the actions of 'rogue
employees'... to the contrary, it often seems that when a 'rogue' is trotted
out as the culprit for malfeasance, many people with a brain to think come to
conclusion that the 'rogue' is simply being scapegoated to paper over an
systemic problem (viz LIBOR scandal, 2010 flash crash in US markets, etc.)

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at-fates-hands
Even in the midst of Enron rising so fast, there were a ton of people who knew
something wasn't right and none of them did anything about it. And why was
that?

Money and a LOT of it. Management didn't want to do anything because of they
were getting rewarded for how well the company was doing. Why kill your own
gravy train? Why would the auditors stop it? The same reason, they were making
millions in consulting fees and had no reason to stop the train. Congress
could have done something, but thwarted Arthur Levitt's proposed new rule
barring accountants acting as consultants. The rule was shot down and the SEC
was threatened with losing their funding if they did this by some 50 senators.

So even if this software predicts rouge traders, it can only alert the right
people to do something about it. And even if it does, what are the odds those
people have the morale compass to make the right decision? Probably less than
50/50 because of the money involved.

Having the software is only the first step in a long chain of decisions which
are made by the weakest link in the chain, the human being.

~~~
ConfuciusSay
If anyone cared to look, the troubles with Enron's accounting were right there
in their SEC filings - long before the shit hit the fan.

In fact the reporter who broke the story did it by simply analyzing the SEC
filings, as opposed to getting some insider information, or talking to a
whistleblower.

~~~
pyvpx
can you recommend any resources to read more about this? I wasn't aware and it
sounds incredibly interesting to me.

~~~
ethanbond
"The Smartest Guys in the Room" is a _fantastic_ documentary about the whole
ordeal. It's not too information dense so you probably want other resources.
It's a very good low-effort primer that will leave you with a "what the f*?!"
look on your face for the rest of the week.

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rubbingalcohol
So Wall Street has their own set of "threat indicators" now. Imagine what
happens when CISA (Cyber Intelligence Sharing Act) passes, allowing them to
share this data with military and police surveillance agencies. Suddenly,
anyone who does "suspiciously" well on the stock market could have a federal
investigation secretly launched against them.

~~~
ethanbond
> Suddenly, anyone who does "suspiciously" well on the stock market could have
> a federal investigation secretly launched against them.

Do you not think that's the case today?

That's what the SEC _does_.

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jackgavigan
A lot of the impetus behind investment banks' interest in these types of
products stems from the need to be able to demonstrate to regulators that they
are doing something about past failings. Software is attractive because if you
have a "system" to manage these risks, it means you don't have to hire
(expensive) staff.

The problem I'm seeing is that the industry is so complex that software
companies often don't fully understand the problems that financial services
companies need to solve, so the solutions they're producing come up short. I
reckon it's going to be a couple more years before these solutions
evolve/develop to the point where they start delivering on their promise.

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zby
What would be intereting is to feed it The Hacking Team emails
[https://wikileaks.org/hackingteam/emails/](https://wikileaks.org/hackingteam/emails/)

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wahsd
Surprise! Wall Street is all in on manipulation and abuse.

~~~
reverend_gonzo
If you read the actual article, you'd see that financial firms are using this
software to try and detect rogue traders and fraudulent activity.

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witty_username
Bypass the paywall with Google's referrer:

[https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web...](https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB8QqQIwAGoVChMI_6fjl4qNxwIVSQqOCh0eMgCN&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fspy-
software-gets-a-second-life-on-wall-
street-1438541720&ei=u3S_Vb_eOcmUuASe5IDoCA&usg=AFQjCNEjbiOx7HMKRht0q-A7L7O0vktZZA&sig2=IofBBRwxv0_rzxcq7R2gfQ&bvm=bv.99261572,d.c2E)

~~~
hellbanner
Is bypassing paywalls illegal, like circumventing DRM?

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doubt_me
Nope not at all.

And thanks for the link I appreciate it @witty_username

~~~
hellbanner
I doubt you.

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dfc
I think there should be a "soft rule" against submitting content behind a
paywall. "Soft" in the sense that there are known exceptions to the rule;
unique story or voice, life changing story, etc.

I don't think "hacking team rehash + greedy wall street" is going to make the
list of exceptions.

~~~
sp4ke
I agree. I get so much frustrated everytime I end up behind a paywall for an
article I was genuinely interested to read. Plus, content behind paywalls is
not something that should be acceptable in an open community like KN where no
one should have exclusive access to knowledge shared on the platform

