None of it makes sense in the context of a well-run business with proper executives in place. That’s because these frauds don’t operate like a well-run business.
Usually, the upper management teams are extremely lean. The business is broken up into different silos such that few people can see the big picture. Each is led to believe they are a tiny fraction of the overall revenue, giving them the impression that the bulk of the company’s revenue must come from another department where they have no visibility. As a bonus, this motivates siloed teams to feel like they need to catchup to the rest of the company, when in reality they might be the main driver of it. It helps to have separate offices and a culture of secrecy to prevent people from comparing notes.
The CEO positions himself as a controlling, micromanaging individual at the center of everything. This makes it possible for the CEO to intercept financials and other crucial numbers en route to people who might catch on.
The rest of the management staff might be filled with people too inexperienced to recognize that something is wrong. They might think the CEO is doing them a favor by giving them a golden opportunity to advance their career into an executive position at a rocket ship startup. They don’t know what they’re doing, but they think it’s okay because the CEO has taken them under his wing.
At scale it becomes difficult to do this without at least a few people being complicit, though. A fraudster usually has several close associates who can be trusted to be in on the fraud or at least look the other way for a while.
Sometimes tribal/"team sport" group dynamics keep employees inline too. Executives can foster an "us against the world" mentality that blinds workers to that which is obvious to everybody else. When in this mindset, people have the ability to ignore even the most damning evidence.
Here's an example: When Enron's CEO verbally attacked wall street analyst Richard Grubman for questioning Enron's accounting practices, Enron employees thought this was hilarious and adopted the insult as a sort of inside joke. They didn't consider Richard Grubman's position, they just took delight in 'their team' dunking on 'opposing team.'
Leaving aside the specific politics, this is one of many reasons I advocate for replacing voting with sortition (picking representatives from the electoral roll, in much the same way as juries are picked).
When done right the vacation is sprung on them without notice. In reality they usually know when their vacation is coming so they can alert their cohorts.
The idea is everyone must take vacation (sometimes X+ consecutive days each year), not just the people you suspect of running scams.
Giving all of your employees two weeks unannounced vacation at random times is a disruptive way to run a company. It's certainly innovative but I wouldn't say it's HR "done right".
Large companies simply have different risks. If someone quitting randomly is a huge risk for your business you want to know about it ahead of time to mitigate it while they still work for you. 1 random week of vacation every ~3 years shouldn’t be a big deal, and discovering it was is valuable.
If you want to give me an unscheduled couple of weeks off with pay, I'm perfectly cool with that--so long as you don't hold it against me that work doesn't get done. Don't expect me to take it out of my limited planned vacation time though.I have my own plans. That would be a big FU for me.
Sure, so maybe that is a sign that trading isn’t the right industry for you?
I know firefighters often work 72 hour straight shifts. For a similar reason, I know being a firefighter isn’t the right career for me.
I suspect some jobs need to optimize days off for things other than employee happiness. For trading specifically, they can generally make up for it with above average pay.
Fair enough. If you know the deal going in--e.g. you get 3 weeks of paid vacation but we will tell you when you have to take one/two of them with no notice. Certainly there are many jobs that have to schedule people, e.g. support, although there it's mostly about having to schedule well in advance and possible having to work at popular times. I am indeed fortunate to have a lot of flexibility.
Bingo! I worked in the upper management team of an early stage startup where the CEO was lying through his teeth to investors as well as employees. There were only three people at the top level. He was a super charismatic guy and a great story teller. No one thought he was lying until it came time to raise the next round and the lead investor from seed round ran due diligence to find booked revenue was no where close to what CEO had been claiming.
Agree, this being a cyber-fraud company I believe one could keep a team busy for a long time focusing on building secure systems rather than operating them to the point where no-one gets to see what's actually being stored within. The paper trail though I'm still puzzled about, he couldn't have acted alone.
In the past, traders were siloed and no individual trader would have access to the total positions of all the traders on the floor. Some firms still operate this way, though it's more common for trading operations to be broken up into "pods" or teams of traders and analysts.
The industry has largely moved away from this structure for a variety of reasons. One of the problems is that traders start to try and undermine each other, since the only thing that matters is your personal pnl. Another problem is that traders can unknowingly all pile into the same investments, resulting in massive risk. This is part of the reason why the Great Recession was so bad.
Usually, the upper management teams are extremely lean. The business is broken up into different silos such that few people can see the big picture. Each is led to believe they are a tiny fraction of the overall revenue, giving them the impression that the bulk of the company’s revenue must come from another department where they have no visibility. As a bonus, this motivates siloed teams to feel like they need to catchup to the rest of the company, when in reality they might be the main driver of it. It helps to have separate offices and a culture of secrecy to prevent people from comparing notes.
The CEO positions himself as a controlling, micromanaging individual at the center of everything. This makes it possible for the CEO to intercept financials and other crucial numbers en route to people who might catch on.
The rest of the management staff might be filled with people too inexperienced to recognize that something is wrong. They might think the CEO is doing them a favor by giving them a golden opportunity to advance their career into an executive position at a rocket ship startup. They don’t know what they’re doing, but they think it’s okay because the CEO has taken them under his wing.
At scale it becomes difficult to do this without at least a few people being complicit, though. A fraudster usually has several close associates who can be trusted to be in on the fraud or at least look the other way for a while.