Friday, June 1, 2012

Explore More: A TAKEDOWN Study Guide

Although TAKEDOWN is a fictional work its underpinnings are serious issues that impact all of us.

In the real world we’ve seen a pattern of troubling computer software failures in the equity markets this past year.

The BATS IPO was marred by “computer glitches”:

http://www.marketwatch.com/story/system-error-calls-for-bats-to-halt-listings-2012-03-26?link=MW_home_latest_news

Facebook’s failed IPO was also blamed on computer software “glitches”.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/21/BUTC1OL6BK.DTL


Computerized high frequency trading (HFT) is whipsawing the market and is the likely culprit in “flash crash” scenarios:

http://www.bloomberg.com/news/2011-08-11/high-frequency-firms-tripled-trading-as-s-p-500-plunged-13-wedbush-says.html

http://tech.fortune.cnn.com/2012/03/24/apple-and-the-risks-of-trading-29000-times-per-second/



The SEC’s inability to seriously investigate financial fraud due to regulatory capture by the industry they are given authority to police is another theme woven throughout TAKEDOWN.

Matt Taibbi’s investigative reporting digs in on this topic:

http://www.rollingstone.com/politics/blogs/taibblog/federal-judge-pimp-slaps-the-sec-over-citigroup-settlement-20111129

http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511


The SEC does occasionally catch a fish:

http://www.sec.gov/news/press/2011/2011-117.htm

http://www.nytimes.com/2011/05/14/business/14sec.html


One reader mentioned that Dan Decker's motivations in TAKEDOWN are very similar to John Corzine's at MF Global. Both men started with the best intentions as they tried to save failing institutions, and both ended up committing fraud to achieve their ends.

Is Dan Decker different from Corzine?

How does each man co-opt his colleagues in implementing a scheme?

PBS Frontline has a good, short video about Corzine's takedown of MF Global:

http://www.pbs.org/wgbh/pages/frontline/mf-global-six-billion-dollar-bet/

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