Business ethics

OakFX – Have you been caught?

david

Is David McEwen culpable?

A reader emails:

Let’s say, hypothetically, that I wanted to write a scam forex trading tool.  Something that offered 50-65% returns per annum.

Well trades are easy to make, like bets on black or red at roulette.  I’d let the software pick at random.  Hell, what do I know about future movements in the market anyhow?  Some days you win, some days you lose, right?

Then I’d set the tool up so that it started out by releasing its positive trades as early as it can but make it hang on to negative trades for longer.  That way the impression of a more positive return would be given.  It could even make a bad day into a positive day with such an approach.

If it got some really bad trades I’d program it to keep them open indefinitely in fact – or as long as the margin call permitted.

Then the software would show good returns and for quite some time while the capital held out it would be positive more often than not

When selling it to folks, I could offer a 3 month guarantee of returns when using it from the outset with a full bank balance.  While the closed positive trades show up as a return and the capital outbalances the uncommitted negative trades I’d feel comfortable giving a guarantee that it would be positive for at least 3 months.

I could even offer a Gold version that would outperform the Silver variant too, but at a higher licence fee.  It would do exactly the same thing of course but it would look better simply because it was permitted to work with more capital.  It would see positive returns for longer too – while the negative trades built up anyway.

Eventually the earnings, which are really just the plowed under capital – a la Ponzi, would start to dry up as the capital gets locked up by loss making trades that are “stuck” in the system.   Read more »

Does Len Brown even know what happens in his Council?

The Auckland Council is having to pay out over $300,000 for the actions of a bullying senior manager. Quite apart from the fact that the bully should be coughing out of his own pocket, after all it was he who did the bullying not the ratepayer, you have to wonder of Len Brown has actually got even a single clue as to what is going on inside his council.

A spokeswoman for Mayor Len Brown said the mayoral office was unaware of the matter and would not comment on employment matters.

Really?

Doesn’t Len Brown have a “no surprises” agreement with his Chief Executive?

Council chief executive Doug McKay said the matter was an employment issue that was subject to an investigation and had been resolved.

Mr McKay declined to comment on the payments to the two whistleblowers who resigned, and on other issues raised by the Weekend Herald.

I would have though that over $300,000 in payouts was a fucking big surprise, further I would hazard a guess that those amounts are way above normal sign of authority by the Chief Executive.