Re: Consolidated Audit Trail System - ethical / legal acpects
John Harris / BondMart Technologies, Inc.
10 Aug 2010 4:52PM ET
K. Mahesh,
I understand that the government's Big Brother/Total Information Awareness ("Consolidated Audit Trail") program for financial transactions presents technical problems that interest you. But as an adult, you must know that every action you undertake has a legal/ethical aspect to it. Yes, in your mind, you can choose to disregard the legal/ethical aspects of any particular problem and contemplate solely the technical aspects, but once you act on the matter, that separation becomes untenable.
Throughout history, engineers have attempted to evade moral responsibility for their work. These engineers have attempted to do what you are now attempting: to separate technical from moral considerations. As I suggested in a post that I deleted at the request of the Program Office, engineers seemingly capable of slipping effortlessly into moral blinders have "improved" methods of crucifixion and other tortures, weapons of mass destruction, and tools of genocide. I do not doubt that in many of these cases, they found the technical challenges interesting or solved problems that were used elsewhere for good purposes. But they were nonetheless wrong to employ their skills for murder or mayhem. And no, I am not equating the work of German mechanical and chemical engineers to improve the lethality of Hitler's gas chambers to your proposal of new fields in furtherance of a Big Brother edition of the FIX Protocol. The difference in degree is huge, but the principle is the same. Primum non nocere.
As a software developer you must hold logic in high regard. Do you not see the logical disconnect between your statement "free human beings have a right to keep their financial transaction secret" and your efforts in support of this program? This program forces human beings - all Americans - to surrender their financial privacy. As such, it violates the very right you acknowledge. Therefore, you are aiding the abrogation of rights of your family, friends, colleagues, and neighbors, as well as your own rights and those of millions of people you do not know. How does that compute?
Undoubtedly some of our readers question by now why an essentially political discussion is raging in this forum. They may even be tiring of it. But this is potentially the most important topic ever raised in these boards and directly implicates the future of FIX as we know it. If implemented, this despicable proposal will diminish the vitality and importance of markets from which many of us - including vendors of FIX-related software and services - earn our livings. To the extent those advocating government adoption of FIX for this program succeed, they will have ceded control of the protocol to a vast, remote, politico-bureaucratic process and beast. Are any so naive as to believe that if the government comes to depend on FIX for one of its cherished surveillance programs, it will leave the future of the protocol to the control of private actors?
No, what is really remarkable about this debate is the deafening silence from the audience. So afraid are member firms of offending the bureaucrats at the SEC that they dare not speak out publicly or truthfully against a government proposal astounding for the sweeping magnitude of its Orwellian, anti-competitive character. And thus the employees of these member firms who normally have no reticence in this forum keep their mouths shut, for fear of their jobs.
Have courage my friends. Your jobs are already in danger. This proposal only heightens the risk. Speak out, while you can.
> Hi John Harris,
>
> I am not a lawyer so my knowledge of law is limited to what you called common sense. To be frank, I am not so much bothered about the legal / ethical aspects of this Consolidated Audit Tape System, I am only looking at how it can be technically implemented. Since your post discusses things for which I may not be competent enough to comment on, I would leave it for people more competent than me to answer your questions like the proper role of government in peaceful society, whether insider trading is a crime or not (http://www.investopedia.com/articles/03/100803.asp), what are the only real crimes, principle of prior restraint, etc.
>
> Your post reminds me of the gun control law arguments I saw on TV news somtime back. Why do governments need police and courts? Or better still why do we need governments? Let everybody have their own protection. That was how humanity started many thousand years back. There were no governments, no police / courts, individuals decided what is right and wrong(this still happens in rulal areas of 3rd world countries. In villages of Tamilnadu its called "Katta panchayat" http://archives.chennaionline.com/society/CrimeandSociety/10kpanchayat.asp). Then groups of individuals started deciding whats good for the group and started demarcating "their" territory and defined whats acceptable to the group. Then these territories became kingdoms. Then came democracy and communism. Then came Leauge of nations and now the whole world is kind of under United nations.
>
> I agree with that you free human beings have a right to keep their financial transactions secret. But in the context of a portfolio manager with 50 billion AUM in pension funds, college savings funds etc. of many hundreds of thousands of middle class people, this money does not belong to the portfolio manager and hence all transactions on these funds are public information because if this asset management company goes bankrupt, then the financial future of all these people could be jeopardized.
>
> I am more interested in the software architecture of the CATS system, how to make it handle the vast amounts of data generated from all markets, how to detect activity which violates a SEC law, can Complex Event processing be used, what can the developers of CATS system learn from the developers of systems which monitor heartbeats of coronary patients, earthquake monitors etc.
>
> Regards,
> K. Mahesh
>
> > While some of us accept eagerly the bit, yoke, or saddle and even strain for a cube of sugar or pat on the head from master, others may wish to use the opportunity presented by the SEC's submission of its Big Brother/Total Information Awareness ("Consolidated Audit Trail") program for financial transactions for more human pursuits, such as thinking deeply about what it means to be a human being, what our obligations are to one another as human beings, and the proper role of government in peaceful society. The dangers of this proposal demand nothing less.
> >
> > For those who prefer living as sovereign human beings rather than as farm animals, let me suggest that "rogue trading" is not a crime. It may be a tort, but definitely is not a crime. Neither is "market manipulation" a crime. Like rogue trading or even "insider trading," market manipulation may be a tort, but most assuredly is not a crime.
> >
> > Before you rush to your dog-eared copies of the Exchange Act to prove me wrong, know this: the validity of a law is determined not by legislatures or courts but by common sense. Just because the corrupt, venal, incompetent power-mongers in Congress promulgate a law and the the corrupt, venal, incompetent power-monger in the White House signs it does not make the law valid. If you doubt that for even a moment, type "fugitive slave act" into a Google search box and learn something. It was never a crime to provide safe haven or assist the escape of a slave, no matter what words to the contrary were or are set forth in the United States Code.
> >
> > The only real crimes are assault, theft, fraud, and trespass. Nothing else is a crime and there is no such thing as a victimless crime.
> >
> > All government regulation rests on the principle of prior restraint. Under the principle of prior restraint, the freedom of law-abiding, sovereign human beings is forcibly constrained by other human beings operating as "government" under the theory that if left to their own devices, such sovereign beings will use their freedom to commit crimes. Is anyone reading these words truly so dull-witted that he fails to see that prior restraint is itself a crime (encompassing assault, theft, and trespass)? Shall we bind the arms and legs of peaceful human beings to prevent assault before the fact? Shall we mute them to prevent fraud before the fact?
> >
> > I submit to those of you capable of thinking and walking the earth upright as human beings that the SEC's Big Brother/Total Information Awareness proposal is the vilest, most evil, repugnant excrement the agency has ever produced. Not only is the proposal manifestly incapable of achieving its stated aims or method of operation, it insults your heritage, dignity, birthright, and progeny.
> >
> > I do not and will not submit to this totalitarian proposal. At no moment since my conception did or have I become the property of or beholden to the SEC. It has no right to surveil my financial transactions or any other of my activities, in real time or not, without a warrant issued by a court of law upon a showing of probable cause that I have committed a crime and am subject to its jurisdiction. I have committed no such crime and will not be treated as criminal before the fact.
> >
> > SEC: I say "no." And to hell with you for demanding otherwise. I hope all FPL members and volunteers will see this Big Brother/Total Information Awareness program for the affront and usurpation that it represents and join with me in nullifying it.
> >
> >
> >
> > > Just now submitted to SEC regarding File No. S7-11-10 Consolidated Audit Trail System Release No. 34-62174, in short,
> > >
> > > I proposed that two new Fields
> > >
> > > OrderSourceUserID
> > > OrderSourceSystemID
> > >
> > > be added to the Consolidated Audit Trail System records which would aid SEC regulatory authorities to see details of both people involved in a new order creation - the client for whom the order was placed and the portfolio manager who placed the order and help detect order sources which violate laws / are involved in market manipulation ie. I would like to find ways to stop rouge trader(s).
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