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On the convenional wisdom, [[bad apple]]s find and exploit [[Zero-day vulnerability|zero-day flaws]] in the system, ''which is [[Air crashes v financial crashes|what we should expect bad apples to do]]''. These they will find them exactly where the system least expects them to be found, and is therefore not looking: apparently harmless, sleepy backwaters. [[LIBOR]] submissions. Delta-one stock index swaps. [[Archegos|margin lending]]. | On the convenional wisdom, [[bad apple]]s find and exploit [[Zero-day vulnerability|zero-day flaws]] in the system, ''which is [[Air crashes v financial crashes|what we should expect bad apples to do]]''. These they will find them exactly where the system least expects them to be found, and is therefore not looking: apparently harmless, sleepy backwaters. [[LIBOR]] submissions. Delta-one stock index swaps. [[Archegos|margin lending]]. | ||
But who the bad apples are depends on who is asking, and, critically, ''when'' | But who the bad apples are depends on who is asking, and, critically, ''when''. | ||
''' | Often, the people who look like heroes — NASDAQ chairmen, visionary innovators, star traders —''before'' the fact only start to look like bad apples ''after'' it. And vice versa. | ||
===Before and after fact: a play in two acts=== | |||
====Before-the-fact==== | |||
*'''Heroes''': Nick Leeson, Jeff Skilling, Ken Lay, Jerome Kerviel, Kweku Abodoli, Elizabeth Holmes, Arif Naqvid, Charlie Javis, Jo Lo, Bernie Madoff, Sam Bankman-Fried. | |||
*'''Bad apples''': Fortune journalist [[Enron Corporation|Bethany MacLean]] (Enron). Contrarian hedge fund trader [[Collateralised debt obligation|Michael Burry]] (Subprime). Madoff whistleblower [[Harry Markopolos]]. FT journalist [[Wirecard|Dan McCrum]] (Wirecard). The formalist system systematically ignored them, fired them, tried to put them in prison. | |||
====After-the-fact==== | |||
*'''Heroes''': ______ | |||
*'''Bad apples''': _____ | |||
The JC’s view: the “bad apple” concept is not a good one if the virtue of one’s applehood is only apparent in hindsight. | The JC’s view: the “bad apple” concept is not a good one if the virtue of one’s applehood is only apparent in hindsight. |