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Javier E

Why Didn't the Government Stop the Crypto Scam? - 0 views

mattstoller.substack.com/...-didnt-the-government-stop-the

crypto government regulation capture agency history crisis corruption

shared by Javier E on 22 Nov 22 - No Cached
  • By 1935, the New Dealers had set up a new agency, the Securities and Exchange Commission, and cleaned out the FTC. Yet there was still immense concern that Roosevelt had not been able to tame Wall Street. The Supreme Court didn’t really ratify the SEC as a constitutional body until 1938, and nearly struck it down in 1935 when a conservative Supreme Court made it harder for the SEC to investigate cases.
  • It took a few years, but New Dealers finally implemented a workable set of securities rules, with the courts agreeing on basic definitions of what was a security. By the 1950s, SEC investigators could raise an eyebrow and change market behavior, and the amount of cheating in finance had dropped dramatically.
  • Institutional change, in other words, takes time.
  • ...22 more annotations...
  • It’s a lesson to remember as we watch the crypto space melt down, with ex-billionaire Sam Bankman-Fried
  • It’s not like perfidy in crypto was some hidden secret. At the top of the market, back in December 2021, I wrote a piece very explicitly saying that crypto was a set of Ponzi schemes. It went viral, and I got a huge amount of hate mail from crypto types
  • one of the more bizarre aspects of the crypto meltdown is the deep anger not just at those who perpetrated it, but at those who were trying to stop the scam from going on. For instance, here’s crypto exchange Coinbase CEO Brian Armstrong, who just a year ago was fighting regulators vehemently, blaming the cops for allowing gambling in the casino he helps run.
  • FTX.com was an offshore exchange not regulated by the SEC. The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore. Punishing US companies for this makes no sense.
  • many crypto ‘enthusiasts’ watching Gensler discuss regulation with his predecessor “called for their incarceration or worse.”
  • Cryptocurrencies are securities, and should fit under securities law, which would have imposed rules that would foster a de facto ban of the entire space. But since regulators had not actually treated them as securities for the last ten years, a whole new gray area of fake law had emerged
  • Almost as soon as he took office, Gensler sought to fix this situation, and treat them as securities. He began investigating important players
  • But the legal wrangling to just get the courts to treat crypto as a set of speculative instruments regulated under securities law made the law moot
  • In May of 2022, a year after Gensler began trying to do something about Terra/Luna, Kwon’s scheme blew up. In a comically-too-late-to-matter gesture, an appeals court then said that the SEC had the right to compel information from Kwon’s now-bankrupt scheme. It is absolute lunacy that well-settled law, like the ability for the SEC to investigate those in the securities business, is now being re-litigated.
  • Securities and Exchange Commission Chair Gary Gensler, who took office in April of 2021 with a deep background in Wall Street, regulatory policy, and crypto, which he had taught at MIT years before joining the SEC. Gensler came in with the goal of implementing the rule of law in the crypto space, which he knew was full of scams and based on unproven technology. Yesterday, on CNBC, he was again confronted with Andrew Ross Sorkin essentially asking, “Why were you going after minor players when this Ponzi scheme was so flagrant?”
  • it wasn’t just the courts who were an impediment. Gensler wasn’t the only cop on the beat. Other regulators, like those at the Commodities Futures Trading Commission, the Federal Reserve, or the Office of Comptroller of the Currency, not only refused to take action, but actively defended their regulatory turf against an attempt from the SEC to stop the scams.
  • Behind this was the fist of political power. Everyone saw the incentives the Senate laid down when every single Republican, plus a smattering of Democrats, defeated the nomination of crypto-skeptic Saule Omarova in becoming the powerful bank regulator at the Comptroller of the Currency
  • Instead of strong figures like Omarova, we had a weakling acting Comptroller Michael Hsu at the OCC, put there by the excessively cautious Treasury Secretary Janet Yellen. Hsu refused to stop bank interactions with crypto or fintech because, as he told Congress in 2021, “These trends cannot be stopped.”
  • It’s not just these regulators; everyone wanted a piece of the bureaucratic pie. In March of 2022, before it all unraveled, the Biden administration issued an executive order on crypto. In it, Biden said that virtually every single government agency would have a hand in the space.
  • That’s… insane. If everyone’s in charge, no one is.
  • And behind all of these fights was the money and political prestige of some most powerful people in Silicon Valley, who were funding a large political fight to write the rules for crypto, with everyone from former Treasury Secretary Larry Summers to former SEC Chair Mary Jo White on the payroll.
  • (Even now, even after it was all revealed as a Ponzi scheme, Congress is still trying to write rules favorable to the industry. It’s like, guys, stop it. There’s no more bribe money!)
  • Moreover, the institution Gensler took over was deeply weakened. Since the Reagan administration, wave after wave of political leader at the SEC has gutted the place and dumbed down the enforcers. Courts have tied up the commission in knots, and Congress has defanged it
  • Under Trump crypto exploded, because his SEC chair Jay Clayton had no real policy on crypto (and then immediately went into the industry after leaving.) The SEC was so dormant that when Gensler came into office, some senior lawyers actually revolted over his attempt to make them do work.
  • In other words, the regulators were tied up in the courts, they were against an immensely powerful set of venture capitalists who have poured money into Congress and D.C., they had feeble legal levers, and they had to deal with ‘crypto enthusiasts' who thought they should be jailed or harmed for trying to impose basic rules around market manipulation.
  • The bottom line is, Gensler is just one regulator, up against a lot of massed power, money, and bad institutional habits. And we as a society simply made the choice through our elected leaders to have little meaningful law enforcement in financial markets, which first became blindingly obvious in 2008 during the financial crisis, and then became comical ten years later when a sector whose only real use cases were money laundering
  • , Ponzi scheming or buying drugs on the internet, managed to rack up enough political power to bring Tony Blair and Bill Clinton to a conference held in a tax haven billed as ‘the future.’
dicindioha

Democrats skeptical about SEC nominee's ties to Wall Street - The Washington Post - 0 views

www.washingtonpost.com/...ons-on-wall-street-connections

markets economy SEC

shared by dicindioha on 24 Mar 17 - No Cached
  • Jay Clayton, on Thursday defended his ability to regulate Wall Street despite spending decades helping big banks weather government scrutiny
  • Clayton said, he would make sure “our markets are fair, open, orderly, and efficient and . . . that investors are protected
  • New York lawyer's deep connections to Wall Street, particularly Goldman Sachs, and inexperience with corporate prosecutions drew skepticism from Democrats
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  • Clayton, who made more than $7 million last year, is among six people with ties to Goldman Sachs chosen by Trump to serve in his administration.
  • He was warmly received by Republicans on the committee, who praised his financial industry experience.
  • It seems a little surprising to me that a person's success in a field in which we are asking them to now lead an agency could be a criticism,” said Sen. Mike Crapo
  • Advising on the deal was Clayton.
  • he said. U.S. markets are “less attractive to business than in the past,” and that should change.
  • It should be easier, and cheaper, for companies to sell stock on the public markets, Clayton told them.
  • In those cases, Warren said, if the rest of SEC's four commissioners vote along partisan lines, the investigations would stall and the firms could escape being held responsible.
  • “I think individual prosecutions, particularly in the white-collar area, have a significant effect on behavior,” Clayton said. “I want to be clear: Companies should be held responsible.”
  • Warren said she wants the SEC chair to look into and “put a stop to” any trading advantages Icahn might reap while serving in his new role.
  • dicindioha on 24 Mar 17
     
    This article talks about Trump's pick for the SEC, who formerly advised on the deal where Warren Buffet salvaged Goldmann and Sachs with a $5 billion dollar investment. The article says some question his ability, then, to make sure that companies are held responsible for mistakes in the market. He wants to ensure our markets are "fair" which we know is not a term associated with efficiency, so it will be interesting to see if this occurs.
Javier E

Seven Lessons In Economic Leadership From Ancient Egypt - 0 views

www.forbes.com/...-leadership-from-ancient-egypt

economics reform theory financial crisis financial bubble egypt

shared by Javier E on 11 May 18 - No Cached
  • Although there are plenty of grounds for rage against the big banks, the challenge is to sort out which are the activities that grow the real economy of goods and services, and which are the activities that are essentially a zero-sum game of socially useless gambling?
  • The situation today is that the zero-sum games of the financial sector aren’t just a tiny sideshow. They have grown exponentially and have become almost the main game of the financial sector.
  • When finance becomes the end, not the means, then the result is what analyst Gautam Mukunda calls “excessive financialization” of the economy, as his excellent article by “The Price of Wall Street Power” in the June 2014 issue of Harvard Business Review makes clear.
  • ...15 more annotations...
  • Quite apart from the “unbalanced power” of the financial sector, and the tendency of a super-sized financial sector to cause increasingly bad global financial crashes, excessive financialization leads to resources being misallocated. “In many of the financial sector’s segments that have grown fastest since deregulation—like investment banks—the transactions are primarily zero-sum.”
  • However in times of rapid technological transformation like today, the role of the economic priesthood in protecting its own interests can become a massively destabilizing.
  • Thus we know from the history of the last couple of hundred years that in times of rapid technological transformation, the financial sector tends to become disconnected from the real economy
  • This has occurred a number of times in the last few hundred years, including the Canal Mania (England—1790s), the Rail Mania (England—1840s), the Gilded Age (US: 1880s—early 1900s) the Roaring Twenties (US—1920s) and the Big Banks of today.
  • Getting to safety is not made any easier by the fact the modern economic priesthood—the managers of large firms and the banks—has, like their ancient Egyptian forbears, found ways to participate in the casino economy and benefit from “making money out of money”, even as the economy as a whole suffers.  As Upton Sinclair wrote, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
  • Just as the ancient Egyptian economic priesthood clung to power as the economy stagnated, so today the economic priesthood shows no signs of relinquishing their gains or their power. The appetite and expectation of extraordinary returns is still there.
  • “Corporate chieftains rationally choose financial engineering—debt-financed share buybacks, for example—over capital investment in property, plants and equipment. Financial markets reward shareholder activism. Institutional investors extend their risk parameters to beat their benchmarks… But real economic growth—averaging just a bit above 2 percent for the fifth year in a row—remains sorely lacking.”
  • As a result, the economy remains in the “Great Stagnation”(Tyler Cowen), also known as “the Secular Stagnation (Larry Summers). It is running on continuing life support from the Federal Reserve. Large enterprises still appear to be profitable. The appearance, though not the reality, of economic well-being has been sufficient to make the stock market soa
  • Just as no change was possible in ancient Egyptian society so long as the economic priesthood colluded to preserve the status quo, so the excesses and prevarications of the Financial Sector will continue so long as the regulators remain its cheerleaders.
  • Just listen to the chair of the Securities and Exchange Commission (SEC), Mary Jo White at Stanford University Rock Center for Corporate Governance speaking to directors. In her speech, she makes no secret of her view that the overall corporate arrangements are sound. The job of the SEC, as outlined in the speech, is to find the odd individual who might be doing something wrong. The idea that the large-scale activities of the major banks might be socially corrosive is not even alluded.
  • Thus in times of transformational technology, there is a huge expansion of investment, driven by the financial sector. Wealthy investors begin to expect outsized returns and so there is over-investment. The resulting bubbles in due course burst
  • Just as in ancient Egypt, no progress was possible so long as the myths and rituals of the economic priesthood and their offerings to the gods were widely accepted as real indicators of what was going on, so today no progress is possible so long as the myths and rituals of the modern economic priesthood still has a pervasive hold of people’s minds
  • In the modern economy, the myths and rituals of the economic priesthood are built on the notion that the purpose of a firm is to maximize shareholder value and the notion that if the share price is increasing, things are going well. These ideas are the intellectual underpinnings of the zero-sum activities of the financial sector for “making money out of money”, by whatever means possible
  • Like the myths and rituals of the priests of ancient Egypt, shareholder value theory is espoused with religious overtones. Shareholder value, which even Jack Welch has called “the dumbest idea in the world,” remains pervasive in business, even though it is responsible for massive offshoring of manufacturing, thereby destroying major segments of the US economy, undermining US capacity to compete in international markets and killing the economic recovery.
  • If instead society decides that the financial sector should concentrate on its socially important function of financing the real economy and providing financial security for an ever wider circle of citizens and enterprises, we could enjoy an era of growth and lasting prosperity.
katedriscoll

Supernumerary phantom limb in a patient with basal ganglia hemorrhage - a case report a... - 0 views

www.ncbi.nlm.nih.gov/...PMC5591514

shared by katedriscoll on 03 Nov 20 - No Cached
  • Supernumerary phantom limb (SPL) is a rare neurologic phenomenon, in which a patient misperceives an extra limb in addition to the original set of limbs. We report a case of SPL in a patient with a right basal ganglia hemorrhage and review the previous literature about this peculiar phenomenon.
  • Two days after the event of a right basal ganglia hemorrhage, a 78-year-old male reported a phantom arm protruding from his left shoulder. He could not see or touch the phantom arm but he felt the presence of an addition arm lateral to his paretic arm. Pain or sensory discomfort were absent in either the paretic arm or the phantom arm. He stated that he could intentionally move the phantom arm independent of his paretic arm. The examination showed that the passive movement of his paretic arm did not elicit any movement of his phantom arm. We diagnosed the SPL as a complication of the hypertensive basal ganglia hemorrhage and treated him with anti-hypertensive medications. His phantom arm persisted for 3 weeks, and it gradually faded away.
  • SPL had been reported as a rare complication of various types of cerebral lesions. Right hemispheric lesions were most frequently associated with the SPL. Considering the intentional movement of the phantom arm, we deduced that the SPL might result from the impairment of the sensory feedback system for both internal body image and motor movement.
  • katedriscoll on 03 Nov 20
     
    This is a real life example of the supernumerary phatom limb which we talked about in TOK.
Javier E

Whistleblower: Twitter misled investors, FTC and underplayed spam issues - Washington Post - 0 views

www.washingtonpost.com/...twitter-whistleblower-sec-spam

twitter whistleblower security social media technology

shared by Javier E on 27 Aug 22 - No Cached
  • Twitter executives deceived federal regulators and the company’s own board of directors about “extreme, egregious deficiencies” in its defenses against hackers, as well as its meager efforts to fight spam, according to an explosive whistleblower complaint from its former security chief.
  • The complaint from former head of security Peiter Zatko, a widely admired hacker known as “Mudge,” depicts Twitter as a chaotic and rudderless company beset by infighting, unable to properly protect its 238 million daily users including government agencies, heads of state and other influential public figures.
  • Among the most serious accusations in the complaint, a copy of which was obtained by The Washington Post, is that Twitter violated the terms of an 11-year-old settlement with the Federal Trade Commission by falsely claiming that it had a solid security plan. Zatko’s complaint alleges he had warned colleagues that half the company’s servers were running out-of-date and vulnerable software and that executives withheld dire facts about the number of breaches and lack of protection for user data, instead presenting directors with rosy charts measuring unimportant changes.
  • ...56 more annotations...
  • The complaint — filed last month with the Securities and Exchange Commission and the Department of Justice, as well as the FTC — says thousands of employees still had wide-ranging and poorly tracked internal access to core company software, a situation that for years had led to embarrassing hacks, including the commandeering of accounts held by such high-profile users as Elon Musk and former presidents Barack Obama and Donald Trump.
  • the whistleblower document alleges the company prioritized user growth over reducing spam, though unwanted content made the user experience worse. Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, the complaint asserts, and nothing explicitly for cutting spam.
  • Chief executive Parag Agrawal was “lying” when he tweeted in May that the company was “strongly incentivized to detect and remove as much spam as we possibly can,” the complaint alleges.
  • Zatko described his decision to go public as an extension of his previous work exposing flaws in specific pieces of software and broader systemic failings in cybersecurity. He was hired at Twitter by former CEO Jack Dorsey in late 2020 after a major hack of the company’s systems.
  • “I felt ethically bound. This is not a light step to take,” said Zatko, who was fired by Agrawal in January. He declined to discuss what happened at Twitter, except to stand by the formal complaint. Under SEC whistleblower rules, he is entitled to legal protection against retaliation, as well as potential monetary rewards.
  • “Security and privacy have long been top companywide priorities at Twitter,” said Twitter spokeswoman Rebecca Hahn. She said that Zatko’s allegations appeared to be “riddled with inaccuracies” and that Zatko “now appears to be opportunistically seeking to inflict harm on Twitter, its customers, and its shareholders.” Hahn said that Twitter fired Zatko after 15 months “for poor performance and leadership.” Attorneys for Zatko confirmed he was fired but denied it was for performance or leadership.
  • A person familiar with Zatko’s tenure said the company investigated Zatko’s security claims during his time there and concluded they were sensationalistic and without merit. Four people familiar with Twitter’s efforts to fight spam said the company deploys extensive manual and automated tools to both measure the extent of spam across the service and reduce it.
  • Overall, Zatko wrote in a February analysis for the company attached as an exhibit to the SEC complaint, “Twitter is grossly negligent in several areas of information security. If these problems are not corrected, regulators, media and users of the platform will be shocked when they inevitably learn about Twitter’s severe lack of security basics.”
  • Zatko’s complaint says strong security should have been much more important to Twitter, which holds vast amounts of sensitive personal data about users. Twitter has the email addresses and phone numbers of many public figures, as well as dissidents who communicate over the service at great personal risk.
  • This month, an ex-Twitter employee was convicted of using his position at the company to spy on Saudi dissidents and government critics, passing their information to a close aide of Crown Prince Mohammed bin Salman in exchange for cash and gifts.
  • Zatko’s complaint says he believed the Indian government had forced Twitter to put one of its agents on the payroll, with access to user data at a time of intense protests in the country. The complaint said supporting information for that claim has gone to the National Security Division of the Justice Department and the Senate Select Committee on Intelligence. Another person familiar with the matter agreed that the employee was probably an agent.
  • “Take a tech platform that collects massive amounts of user data, combine it with what appears to be an incredibly weak security infrastructure and infuse it with foreign state actors with an agenda, and you’ve got a recipe for disaster,” Charles E. Grassley (R-Iowa), the top Republican on the Senate Judiciary Committee,
  • Many government leaders and other trusted voices use Twitter to spread important messages quickly, so a hijacked account could drive panic or violence. In 2013, a captured Associated Press handle falsely tweeted about explosions at the White House, sending the Dow Jones industrial average briefly plunging more than 140 points.
  • After a teenager managed to hijack the verified accounts of Obama, then-candidate Joe Biden, Musk and others in 2020, Twitter’s chief executive at the time, Jack Dorsey, asked Zatko to join him, saying that he could help the world by fixing Twitter’s security and improving the public conversation, Zatko asserts in the complaint.
  • In 1998, Zatko had testified to Congress that the internet was so fragile that he and others could take it down with a half-hour of concentrated effort. He later served as the head of cyber grants at the Defense Advanced Research Projects Agency, the Pentagon innovation unit that had backed the internet’s invention.
  • But at Twitter Zatko encountered problems more widespread than he realized and leadership that didn’t act on his concerns, according to the complaint.
  • Twitter’s difficulties with weak security stretches back more than a decade before Zatko’s arrival at the company in November 2020. In a pair of 2009 incidents, hackers gained administrative control of the social network, allowing them to reset passwords and access user data. In the first, beginning around January of that year, hackers sent tweets from the accounts of high-profile users, including Fox News and Obama.
  • Several months later, a hacker was able to guess an employee’s administrative password after gaining access to similar passwords in their personal email account. That hacker was able to reset at least one user’s password and obtain private information about any Twitter user.
  • Twitter continued to suffer high-profile hacks and security violations, including in 2017, when a contract worker briefly took over Trump’s account, and in the 2020 hack, in which a Florida teen tricked Twitter employees and won access to verified accounts. Twitter then said it put additional safeguards in place.
  • This year, the Justice Department accused Twitter of asking users for their phone numbers in the name of increased security, then using the numbers for marketing. Twitter agreed to pay a $150 million fine for allegedly breaking the 2011 order, which barred the company from making misrepresentations about the security of personal data.
  • After Zatko joined the company, he found it had made little progress since the 2011 settlement, the complaint says. The complaint alleges that he was able to reduce the backlog of safety cases, including harassment and threats, from 1 million to 200,000, add staff and push to measure results.
  • But Zatko saw major gaps in what the company was doing to satisfy its obligations to the FTC, according to the complaint. In Zatko’s interpretation, according to the complaint, the 2011 order required Twitter to implement a Software Development Life Cycle program, a standard process for making sure new code is free of dangerous bugs. The complaint alleges that other employees had been telling the board and the FTC that they were making progress in rolling out that program to Twitter’s systems. But Zatko alleges that he discovered that it had been sent to only a tenth of the company’s projects, and even then treated as optional.
  • “If all of that is true, I don’t think there’s any doubt that there are order violations,” Vladeck, who is now a Georgetown Law professor, said in an interview. “It is possible that the kinds of problems that Twitter faced eleven years ago are still running through the company.”
  • The complaint also alleges that Zatko warned the board early in his tenure that overlapping outages in the company’s data centers could leave it unable to correctly restart its servers. That could have left the service down for months, or even have caused all of its data to be lost. That came close to happening in 2021, when an “impending catastrophic” crisis threatened the platform’s survival before engineers were able to save the day, the complaint says, without providing further details.
  • One current and one former employee recalled that incident, when failures at two Twitter data centers drove concerns that the service could have collapsed for an extended period. “I wondered if the company would exist in a few days,” one of them said.
  • The current and former employees also agreed with the complaint’s assertion that past reports to various privacy regulators were “misleading at best.”
  • For example, they said the company implied that it had destroyed all data on users who asked, but the material had spread so widely inside Twitter’s networks, it was impossible to know for sure
  • As the head of security, Zatko says he also was in charge of a division that investigated users’ complaints about accounts, which meant that he oversaw the removal of some bots, according to the complaint. Spam bots — computer programs that tweet automatically — have long vexed Twitter. Unlike its social media counterparts, Twitter allows users to program bots to be used on its service: For example, the Twitter account @big_ben_clock is programmed to tweet “Bong Bong Bong” every hour in time with Big Ben in London. Twitter also allows people to create accounts without using their real identities, making it harder for the company to distinguish between authentic, duplicate and automated accounts.
  • In the complaint, Zatko alleges he could not get a straight answer when he sought what he viewed as an important data point: the prevalence of spam and bots across all of Twitter, not just among monetizable users.
  • Zatko cites a “sensitive source” who said Twitter was afraid to determine that number because it “would harm the image and valuation of the company.” He says the company’s tools for detecting spam are far less robust than implied in various statements.
  • “Agrawal’s Tweets and Twitter’s previous blog posts misleadingly imply that Twitter employs proactive, sophisticated systems to measure and block spam bots,” the complaint says. “The reality: mostly outdated, unmonitored, simple scripts plus overworked, inefficient, understaffed, and reactive human teams.”
  • The four people familiar with Twitter’s spam and bot efforts said the engineering and integrity teams run software that samples thousands of tweets per day, and 100 accounts are sampled manually.
  • Some employees charged with executing the fight agreed that they had been short of staff. One said top executives showed “apathy” toward the issue.
  • Zatko’s complaint likewise depicts leadership dysfunction, starting with the CEO. Dorsey was largely absent during the pandemic, which made it hard for Zatko to get rulings on who should be in charge of what in areas of overlap and easier for rival executives to avoid collaborating, three current and former employees said.
  • For example, Zatko would encounter disinformation as part of his mandate to handle complaints, according to the complaint. To that end, he commissioned an outside report that found one of the disinformation teams had unfilled positions, yawning language deficiencies, and a lack of technical tools or the engineers to craft them. The authors said Twitter had no effective means of dealing with consistent spreaders of falsehoods.
  • Dorsey made little effort to integrate Zatko at the company, according to the three employees as well as two others familiar with the process who spoke on the condition of anonymity to describe sensitive dynamics. In 12 months, Zatko could manage only six one-on-one calls, all less than 30 minutes, with his direct boss Dorsey, who also served as CEO of payments company Square, now known as Block, according to the complaint. Zatko allegedly did almost all of the talking, and Dorsey said perhaps 50 words in the entire year to him. “A couple dozen text messages” rounded out their electronic communication, the complaint alleges.
  • Faced with such inertia, Zatko asserts that he was unable to solve some of the most serious issues, according to the complaint.
  • Some 30 percent of company laptops blocked automatic software updates carrying security fixes, and thousands of laptops had complete copies of Twitter’s source code, making them a rich target for hackers, it alleges.
  • A successful hacker takeover of one of those machines would have been able to sabotage the product with relative ease, because the engineers pushed out changes without being forced to test them first in a simulated environment, current and former employees said.
  • “It’s near-incredible that for something of that scale there would not be a development test environment separate from production and there would not be a more controlled source-code management process,” said Tony Sager, former chief operating officer at the cyberdefense wing of the National Security Agency, the Information Assurance divisio
  • Sager is currently senior vice president at the nonprofit Center for Internet Security, where he leads a consensus effort to establish best security practices.
  • Zatko stopped the material from being presented at the Dec. 9, 2021 meeting, the complaint said. But over his continued objections, Agrawal let it go to the board’s smaller Risk Committee a week later.
  • “A best practice is that you should only be authorized to see and access what you need to do your job, and nothing else,” said former U.S. chief information security officer Gregory Touhill. “If half the company has access to and can make configuration changes to the production environment, that exposes the company and its customers to significant risk.”
  • The complaint says Dorsey never encouraged anyone to mislead the board about the shortcomings, but that others deliberately left out bad news.
  • The complaint says that about half of Twitter’s roughly 7,000 full-time employees had wide access to the company’s internal software and that access was not closely monitored, giving them the ability to tap into sensitive data and alter how the service worked. Three current and former employees agreed that these were issues.
  • An unnamed executive had prepared a presentation for the new CEO’s first full board meeting, according to the complaint. Zatko’s complaint calls the presentation deeply misleading.
  • The presentation showed that 92 percent of employee computers had security software installed — without mentioning that those installations determined that a third of the machines were insecure, according to the complaint.
  • Another graphic implied a downward trend in the number of people with overly broad access, based on the small subset of people who had access to the highest administrative powers, known internally as “God mode.” That number was in the hundreds. But the number of people with broad access to core systems, which Zatko had called out as a big problem after joining, had actually grown slightly and remained in the thousands.
  • The presentation included only a subset of serious intrusions or other security incidents, from a total Zatko estimated as one per week, and it said that the uncontrolled internal access to core systems was responsible for just 7 percent of incidents, when Zatko calculated the real proportion as 60 percent.
  • When Dorsey left in November 2021, a difficult situation worsened under Agrawal, who had been responsible for security decisions as chief technology officer before Zatko’s hiring, the complaint says.
  • Agrawal didn’t respond to requests for comment. In an email to employees after publication of this article, obtained by The Post, he said that privacy and security continues to be a top priority for the company, and he added that the narrative is “riddled with inconsistences” and “presented without important context.”
  • On Jan. 4, Zatko reported internally that the Risk Committee meeting might have been fraudulent, which triggered an Audit Committee investigation.
  • Agarwal fired him two weeks later. But Zatko complied with the company’s request to spell out his concerns in writing, even without access to his work email and documents, according to the complaint.
  • Since Zatko’s departure, Twitter has plunged further into chaos with Musk’s takeover, which the two parties agreed to in May. The stock price has fallen, many employees have quit, and Agrawal has dismissed executives and frozen big projects.
  • Zatko said he hoped that by bringing new scrutiny and accountability, he could improve the company from the outside.
  • “I still believe that this is a tremendous platform, and there is huge value and huge risk, and I hope that looking back at this, the world will be a better place, in part because of this.”
Javier E

Today's Exhausted Superkids - The New York Times - 1 views

www.nytimes.com/...odays-exhausted-superkids.html

learning school success high school college admission happiness psychology

shared by Javier E on 27 Aug 15 - No Cached
  • Sleep deprivation is just a part of the craziness, but it’s a perfect shorthand for childhoods bereft of spontaneity, stripped of real play and haunted by the “pressure of perfection,” to quote the headline on a story by Julie Scelfo in The Times this week.
  • In a study in the medical journal Pediatrics this year, about 55 percent of American teenagers from the ages of 14 to 17 reported that they were getting less than seven hours a night, though the National Sleep Foundation counsels 8 to 10.
  • Smartphones and tablets aggravate the problem, keeping kids connected and distracted long after lights out. But in communities where academic expectations run highest, the real culprit is panic: about acing the exam, burnishing the transcript, keeping up with high-achieving peers.
  • ...1 more annotation...
  • “No one is arguing for a generation of mediocre or underachieving kids — but plenty of people have begun arguing for a redefinition of what it means to achieve at all,” wrote Jeffrey Kluger in Time magazine last week. He noted, rightly, that “somewhere between the self-esteem building of going for the gold and the self-esteem crushing of the Ivy-or-die ethos, there has to be a place where kids can breathe.”
caelengrubb

Insider Trading - Econlib - 0 views

www.econlib.org/...InsiderTrading.html

shared by caelengrubb on 27 Mar 21 - No Cached
  • Insider trading” refers to transactions in a company’s securities, such as stocks or options, by corporate insiders or their associates based on information originating within the firm that would, once publicly disclosed, affect the prices of such securities.
  • Corporate insiders are individuals whose employment with the firm (as executives, directors, or sometimes rank-and-file employees) or whose privileged access to the firm’s internal affairs (as large shareholders, consultants, accountants, lawyers, etc.) gives them valuable information.
  • Famous examples of insider trading include transacting on the advance knowledge of a company’s discovery of a rich mineral ore (Securities and Exchange Commission v. Texas Gulf Sulphur Co.), on a forthcoming cut in dividends by the board of directors (Cady, Roberts & Co.), and on an unanticipated increase in corporate expenses (Diamond v. Oreamuno).
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  • Such trading on information originating outside the company is generally not covered by insider trading regulation.
  • Insider trading is quite different from market manipulation, disclosure of false or misleading information to the market, or direct expropriation of the corporation’s wealth by insiders.
  • Regulation of insider trading began in the United States at the turn of the twentieth century, when judges in several states became willing to rescind corporate insiders’ transactions with uninformed shareholders.
  • One of the earliest (and unsuccessful) federal attempts to regulate insider trading occurred after the 1912–1913 congressional hearings before the Pujo Committee, which concluded that “the scandalous practices of officers and directors in speculating upon inside and advance information as to the action of their corporations may be curtailed if not stopped.”
  • The Securities Acts of 1933–1934, passed by the U.S. Congress in the aftermath of the stock market crash, though aimed primarily at prohibiting fraud and market manipulation, also targeted insider trading.
  • As of 2004, at least ninety-three countries, the vast majority of nations that possess organized securities markets, had laws regulating insider trading
  • Several factors explain the rapid emergence of such regulation, particularly during the last twenty years: namely, the growth of the securities industry worldwide, pressures to make national securities markets look more attractive in the eyes of outside investors, and the pressure the SEC exerted on foreign lawmakers and regulators to increase the effectiveness of domestic enforcement by identifying and punishing offenders and their associates operating outside the United States.
  • Many researchers argue that trading on inside information is a zero-sum game, benefiting insiders at the expense of outsiders. But most outsiders who bought from or sold to insiders would have traded anyway, and possibly at a worse price (Manne 1970). So, for example, if the insider sells stock because he expects the price to fall, the very act of selling may bring the price down to the buyer.
  • A controversial case is that of abstaining from trading on the basis of inside information (Fried 2003).
  • There is little disagreement that insider trading makes securities markets more efficient by moving the current market price closer to the future postdisclosure price. In other words, insiders’ transactions, even if they are anonymous, signal future price trends to others and make the current stock price reflect relevant information sooner.
  • Accurately priced stocks give valuable signals to investors and ensure more efficient allocation of capital.
  • The controversial question is whether insider trading is more or less effective than public disclosure.
  • Insider trading’s advantage is that it introduces individual profit motives, does not directly reveal sensitive intercorporate information, and mitigates the management’s aversion to disclosing negative information (
  • Probably the most controversial issue in the economic analysis of insider trading is whether it is an efficient way to pay managers for their entrepreneurial services to the corporation. Some researchers believe that insider trading gives managers a monetary incentive to innovate, search for, and produce valuable information, as well as to take risks that increase the firm’s value (Carlton and Fischel 1983; Manne 1966).
  • Another economic argument for insider trading is that it provides efficient compensation to holders of large blocks of stock
  • A common contention is that the presence of insider trading decreases public confidence in, and deters many potential investors from, equity markets, making them less liquid (Loss 1970).
  • Empirical research generally supports skepticism that regulation of insider trading has been effective in either the United States or internationally, as evidenced by the persistent trading profits of insiders, behavior of stock prices around corporate announcements, and relatively infrequent prosecution rates (Bhattacharya and Daouk 2002; Bris 2005).
  • Despite numerous and extensive debates, economists and legal scholars do not agree on a desirable government policy toward insider trading. On the one hand, absolute information parity is clearly infeasible, and information-based trading generally increases the pricing efficiency of financial markets. Information, after all, is a scarce economic good that is costly to produce or acquire, and its subsequent use and dissemination are difficult to control. On the other hand, insider trading, as opposed to other forms of informed trading, may produce unintended adverse consequences for the functioning of the corporate enterprise, the market-wide system of publicly mandated disclosure, or the market for information.
Javier E

Opinion | Standard metrics won't suffice. Here's how to measure Trump's failures so the... - 0 views

www.washingtonpost.com/...a-99a1-71343d03bc29_story.html

metrics comparative statistics rhetoric language psychology

shared by Javier E on 04 Sep 20 - No Cached
  • Maybe what’s needed are different units for measuring the Trump administration’s failures and scandals, since the standard metrics aren’t registering. His record should be quantified in scales that a Fox News viewer might be more familiar with: not body counts or dollars, but Benghazis and Solyndras.
  • For instance, sometimes pundits try to put the 183,000 covid-19 deaths in context by noting that cumulative deaths per capita in the United States are double those of Canada, quintuple those of Germany, 20 times those of Australia, 90 times those of South Korea, and so on.
  • here’s a different way to contextualize this national trauma: The number of lives lost to covid-19 is roughly equal to the death toll of 60 9/11 attacks.
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  • Last week alone, though, 1.6 million people newly applied for unemployment benefits. That’s the equivalent of 2,300 Carrier plants
  • Somehow, for years, the four tragic deaths in Benghazi consumed the agenda of six GOP-controlled congressional committees and the programming of the most-watched cable news channel. But today, a deadly shock magnified by government ineptitude that has led to 46,000 times as many lives lost “is what it is.”
  • the coronavirus death toll is about 46,000 Benghazis
  • According to congressional investigators, Navarro negotiated a contract that resulted in the government overpaying for ventilators by $500 million. (The contract was canceled Monday.) He also championed a $765 million federal loan to Eastman Kodak to transform it into a drugmaker. (The loan has since unraveled and is the subject of a securities investigation.)
  • So how many taxpayer dollars was Navarro involved in wasting through these two deals alone? Measured in units that should be familiar to consumers of right-wing news, it’s roughly two Solyndras.
  • The debt increase under Trump during a single term is on track to surpass that under Obama across two terms.
  • For each Hillary Clinton private email scandal (one), there are at least eight senior Trump officials who have reportedly used private email to conduct official business
  • For every Obama-era incident involving supposed retaliation against political opponents, there are literally dozens of instances of Trump trying to use the power of his office to punish perceived enemie
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