By @SimonCocking. Review of ‘Rogues of Wall Street: How to Manage Risk in the Cognitive Era’ by Andrew Waxman. Available from Wiley here.

Reduce or prevent risk failure losses with new and emerging technologies

Rogues of Wall Street analyzes the recent risk failures and errors that have overwhelmed Wall Street for the past decade. Written by a veteran risk, compliance, and governance specialist, this book helps bank leaders and consultants identify the tools they need to effectively manage operational risk. Citing different types of risk events such as: Rogue and Insider Trading, cyber security, AML, the Mortgage Crisis, and other major events, chapters in the first half of the book detail each operational risk type along with its causative and contributing factors. The second half of the book takes an overarching approach to the tools and solutions available to financial institutions to manage such events in the future. From technology, to culture, to governance, and more, this book does more than simply identify the problem—it provides real-world solutions with actionable insight.

This is an interesting and readable book, about past scams, ripoffs, and sharp insider trading. It is well researched and written in an accessible way, and helps you to have a wider awareness of terms you may have heard of, Ponzi schemes and the like. The historical chapters are good and it was a pleasant book to read. My concerns with the book are perhaps the challenges of always when you write a book, will it remain relevant and useful after it has been written?

In reading this book a couple of thoughts kept coming to mind. The first that at times reading this felt like hearing the sound of the stable door closing, after the proverbial horse(s) had fled. Reading through the chapters it felt long on description of what scams had been perpetuated, but shorter on solutions for how to head them off in the future, which, in the title at least, is something that is suggested as one of the themes. The other aspect was with the influx of new cryprocurrencies, ICO launches, and a whole wave of new forms of fund raising, fund management, and inevitably fund misappropriation, I found myself wanting to know how, (on earth?)  these will be managed?

You will have probably noticed we are covering more crypto related stories these days, and one key theme is new emerging companies trying to deal with this issue of trust. Even though blockchain is, and will be a solution for the missing layer of trust online, it is still a nascent technology. In this context for a second edition of this book, or perhaps for a whole new book, it would be good to see the author apply the same treatment and methodology to the crypto space?


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