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{{a|systems|{{image|bad apple|jpg|}}}}{{dpn|/bæd ˈæpl/|n|}}One of those mischievous human imps occupying unobserved crevices in the great steampunk machine who, by their human frailty, ruin the best-laid plans of the machines. | {{a|systems|{{image|bad apple|jpg|}}}}{{dpn|/bæd ˈæpl/|n|}}One of those mischievous human imps occupying unobserved crevices in the great steampunk machine who, by their human frailty, ruin the best-laid plans of the machines. | ||
On the | On the conventional wisdom, [[bad apple]]s are the remaining fly in the ointment between us and the sunlit uplands of [[financial services utopia]]. Once the last one can be removed all will be well in perpetuity. | ||
But who the bad apples are depends on who is asking, and, critically, ''when''. | The JC wonders whether we should be quite so surprised. Bad apples gonna be bad. They will always 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. [[Enron|The accounting department]]. The [[Kweku Abodoli|Delta-one index swaps desk]]. In a [[Archegos|family office]]. | ||
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. | 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 and after fact: a play in two acts=== | ||
Quiz time: taking the information supplied about who everyone thought was hero and bad apple before a famous catastrophe, fill in who you think was who ''after'' the event. | |||
====Before | {| class="wikitable" | ||
*'''Heroes''': Nick Leeson, Jeff Skilling, Ken Lay, | |+ Caption text | ||
|- | |||
! Incident !! colspan="2"|Before !!colspan="2"| After | |||
|- | |||
! || Hero|| Bad Apple || Hero || Bad Apple | |||
{{aligntop}} | |||
| [[Enron]] ||Jeff Skilling<br>Ken Lay<br>Andrew Fastow || Fortune Journalist Bethany MacLean<br>Short-seller Jim Chanos || _______ || _______ | |||
{{aligntop}} | |||
| [[Madoff]] || Bernie Madoff<br>Fairfield Sentry<br>The [[SEC]]||Option Trader Harry Markopolos <br>Barron’s Journalist Erin Arvedlund || _______ || _______ | |||
{{aligntop}} | |||
| [[Barings Bank|Barings]]|| Nick Leeson<br>Peter “not terribly difficult” Baring || Er || _______ || _______ | |||
{{aligntop}} | |||
| [[Archegos]] || Bill Huang <br>Co-heads of Prime Brokerage, everywhere || Junior credit officer || _______ || _______ | |||
{{aligntop}} | |||
| [[FTX]] || Sam Bankman-Fried<br>Caroline Ellison || Matt (So it’s a ponzi scheme?) Levine || _______ || _______ | |||
{{aligntop}} | |||
| [[WireCard]]|| Markus Braun<br>Jan Marsalek<br>[[BaFin]]|| FT Journalist Dan McCrum<br>Internal lawyer Pav Gill<br>Short-seller Matthew Earl || _______ || _______ | |||
|} | |||
====Before the fact==== | |||
*'''Heroes''': Nick Leeson, Jeff Skilling, Ken Lay, Andrew Fastow, Jérôme 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. | *'''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. |