The Joel on Software Discussion Group

This is kind of interesting. These two guys wrote software that enabled Madoff's ponzi scheme. The SEC is sueing them. Maybe we'll find out more in the coming days.

From the NY Times:
http://www.nytimes.com/2009/11/14/business/14madoff.html?_r=1&hp

Yes, that IS very interesting.

Great example of how the programmers at a company CAN be held liable for the results of their work at that company.

Also should be taken into account by anyone that thinks programmers are not professionals who have an intrinsic professional liability and can not get away with saying they were merely following orders.

I don't think one can generalize that to mean programmers can be prosecuted for the work they do - it is clear they knew it was fraud and then kept doing it.  Without the knowledge of the crime I think it would be a lot harder to sell prosecution.

From the article, when their consciences started to eat at them they were settled for: "25 percent pay increases and bonuses of about $60,000"... I dunno, that's more chump change than "F-U money", especially when the Madoff family booked 200 Million in earnings.

It does make you wonder why they don't make programmers get bonded like anybody who works with cash.  Sure, we don't work with CASH, but we do often work with a company's financials.

I don't see any practical reason to bond/license programmers when EULAs allow companies to get off scot free. 

SEC complaint:
http://sec.gov/litigation/complaints/2009/ohara-perez-111309.pdf

Criminal complaint:
http://www.scribd.com/doc/22510733/Criminal-Complaint-Against-2-Programmers-for-Aiding-Madoff

From the SEC complaint, one programmer started working for Madoff in 1990, and the other in 1991. They worked on 2 separate "trading" computer systems, one called "House 5" which held real transactions and the other called "House 17" which used a number of algorithms to generate random numbers that would pass a number of checks, including Benford's law.

http://paul.kedrosky.com/archives/2009/11/surprise_not_ma.html

From reading the complaints, it appears that the defendants put a lot of time into fudging numbers and making the trade book look like it was performing actual trades and beating the market by doing things like claiming that they bought shares of X when it was at a market low and selling when the stock was near a peak.

>Great example of how the programmers at a company CAN be held liable for the results of their work at that company.

I strongly disagree. These guys were not innocent bystanders, nor were they "following orders." They were very important conspirators, and Madoff would not have been able to pursue his frauds as long as he had done so without their collaboration.


The accountant who was supposed to audit the books plead guilty to doing an arthur anderson:
http://www.reuters.com/article/idUSTRE5A23VZ20091103

Do you really think that those guys had no idea what they were doing? And by the way, since when is it not OK to sue? Someone in the SEC just needs to prove that they are not dead meat, and so they just do the easiest thing.

Of course, I'd be interested to follow this up, if it ever gets into court...

"Do you really think that those guys had no idea what they were doing?"

Difficult to tell - if they really did know don't you think they would have negotiated for rather more money?