The NYT Magazine ran an article Sunday about Harry Markopolos, the Madoff whistle blower called Math Is Hard.
According to the article, Markopolos discusses what’s wrong with the SEC – it’s the attorneys and their way of thinking.
That got me thinking about how horrible Chuck Prince did at running Citi. Insight from Markopolos and the Chuck Prince meltdown might provide for an interesting case study in why you’d want a very successful trader – someone with excellent skills at risk management – to run a large trading firm as well as a regulatory body and exchanges.
From the NYT Magazine:
Are you saying the S.E.C. under Schapiro is about to catch fraud on Wall Street?
She has the wrong staff. They’re a bunch of idiots there.
What do you mean?
The five commissioners of the S.E.C. are securities lawyers. Securities lawyers never understand finance. They don’t have the math background. If you can’t do math and if you can’t take apart the investment products of the 21st century backward and forward and put them together in your sleep, you’ll never find the frauds on Wall Street.