SEC Investigation

Jason works in the financial center, so it's especially interesting to see his take on the failure of the SEC to detect what was happening with Madoff:

My take: One of Megan's commenters got it right: The SEC is made up of lawyers, not quants. They are simply not equipped to do deep due diligence on funds with complex trading strategies: It would take an advanced degree in statistics and a hellacious amount of number crunching to pull that off, and I haven't met the lawyer yet who is equipped to do that on his or her own... nor are the people who can do such things inclined to work for the SEC, or in journalism, for that matter, because the money isn't good enough.

On the other hand, I have met very few lawyers who truly understood the limitations of their field of expertise and circle of competence... an observation buttressed by the many stupid attempts to legislate from the bench. Or from the legislature, for that matter.

It is entirely within the realm of possibility that Cheung was a faithful and industrious public servant who did the level best she knew how, given the resources at her disposal and the fund of information she had, or reasonably could have had. The fault very properly lies with higher-ups who knew her expertise was in law, and not quant, and who failed to adequately supervise her, by providing her with the staff expertise or access to outside knowledge she needed to carry out an investigation of this nature.

The only thing he leaves out is that those higher ups were Bush appointees, and ultimately Bush himself. It must have been tough for a libtard hating fact checker to go as far as he did.