Maybe you should spend a moment researching rather than using some nebulous transitive property of "if they hired this person, they must also be a scam."
Jane St is a prop trading firm - the only money they have to lose is their own.
I work in the trading industry. These people had short tenures at JS, especially Ellison. They weren't seasoned senior traders making big decisions. JS, unlike Alameda, has been in the business for 20+ years and have been very profitable for most of their existence.
It would be worrisome if most of Alameda was full of ex-JS traders, who had been there for 7+ years.
One of the biggest financial frauds of this century has just been perpetrated by two young people that used to work for them, the questioning related to "how did Jane Street hire these people" is perfectly logical.
Well the interview process is more or less "are you good at probability puzzles and games somewhat related to trading."
A plausible story to me is that they were good at whatever they screen for in the interview and then at Jane Street they made a bunch of money. Then they attributed too much of that to themselves and not enough to whatever institutional processes and risk frameworks they benefited from. They bring themselves but not those processes to their own trading firm, and then boom!
I worked on quant buy side for a long time and you dont just automatically come out of these places knowing one secret to making money trading. equally smart on paper people might be working on message passing, risk management, data analysis, special projects, also trading, simulator, database, and might spend 5 years in-house and not come away from the experience with knowledge which by itself represented major alpha.
for me just knowing how to setup a quant trading firm, how to choose prime brokers, how to find and select vendors, leased lines, how to setup paper work, cap intro relationships, exchange memberships, FIX certs, are of equal value as alpha tricks, and really I dont even see a lot of evidence that the Almeda / FTX people were particularly well-seasoned in any respect.
How would Will MacAskill have enough sway to get SBF in Jane Street? Also, why would that matter? I have absolutely no reason to believe SBF couldn't pass their interviews.
The Societe Generale guy that managed to lose 5 billion euros for the bank through "breach of trust and forgery" (to quote wikipedia [1]) didn't work in the risk management department. I don't think that was any consolation for the bank's stakeholders.
> Jane Street risk controls from people who didn't have that role.
I'm talking about the Jane Street risk control people not being able to filter out two of the biggest fraudsters of this century. Yes, I know that, technically, the Jane Street risk control people most probably only focus on the risky stuff that might bring their house down, and, as such, they most probably wash their hands when it comes to the deeds of their former employees, but I was under the impression that when those sort of shops hire someone there's also a general screening for "is this a guy/lady that is going to swindle billions of dollars in the near future"?
And, to be honest, I guess that's what the cachet of people like SBF was, especially in a very deregulated and wild market like crypto is. More exactly "normal" people would have thought along the lines of: "this guy has worked for Jane Street -> I've read Jane Street are cool, honest people, so they must have done some vetting of their employees -> SBF most probably won't run with my money".
More generally speaking, as you most probably well know, the whole house of finance is built on trust and trust alone. That goes for crypto, that goes for traders like JS, that goes for boring money market funds, that goes for the FED itself (probably with trust decreasing from Fed -> to MMFs -> to traders -> to crypto).
When such swindlers like SBF and Caroline Ellison both happen to have worked at any one entity that's part of that chain of trust that I mentioned, then said entity can't just wash its hand saying "well, we checked out on them, they were fine when they used to work for us", it doesn't work like that. People will start asking themselves: "Are there other swindlers now working for JS that JS has failed to catch during its vetting process? If yes, do they risk bringing the whole JS house down?".
Well, then we're going to have SBFs and Kervels going well into the future. Kervel was 5 billion, SBF is, what, 10 to 15 billion, going by the same progression in 5 years' or 10 years' time the next guy is going to swindle 30 billion or so.
All the while the IBs and the algo traders and all those fancy financial shops will keep saying: "how could we have known? We're not mind-readers! These are not our people!". Madness.
Also, by "JS risk control" people I was not only thinking about the spreadsheet guys. I hope to the gods of Mammon that there still is some sense of "is this guy trustful? Does he belong in this trust-based industry?" active inside of those firms, and, no, I don't expect the spreadsheet guys from credit risk to be in charge of it.
If you're telling me that "no, there's no such department in any of those institutions! Any crook can get hired as long as he passes the technical interview" then I think the industry has a whole has a big f.ing problem.
It's not about losing other people's money only. What I'm worried about is: are extremely over-leveraged and able to get the returns they have by doing tax and regulatory dodges that their competitors aren't participating in? Did SBF learn how to operate in the financial world from seeing how Jane Street operates?
Knight was the largest market maker on NASDAQ and NYSE at the time they blew up so if you're going to use "they're just a market maker" as a defense for JS you can't dismiss Knight as "oh, not THAT kind of market maker." And Knight was known for plenty of shady activity like front running and spoofing.
Knight did not blow up due to fraud, so they were not "below board." Losing money is not against the law.
Furthermore, Jane St only trades their own capital - ie. not capital deposited by customers in an exchange and not capital provided by selling ownership stakes of itself on a public market. This is a clear distinction from Knight.
It's as if some guy just had a bunch of money, traded it and made some more money, hired a bunch of people to keep trading it, and it has made a ton of great returns and people are asking: is this a scam?
Who would it be scamming? The only suckers are this guy.
Jane St is a prop trading firm - the only money they have to lose is their own.