Wall Street Fumbled the Ball, says Citadel’s Griffin

The receding tide on Wall Street has revealed that many well respected exec's were indeed swimming naked. Were they just creations of the PR departments? Or only competent at self promotion all along?

Ken Griffin has always been a belt and suspenders kind of guy; obsession with risk management has treated him well over the past few years. Although Citadel Investment Group might not make a fortune in their investment in E-Trade, or displace the Chicago Mercantile Exchange as the most liquid futures mart in the world, he has navigated the past few years in a fashion that recalls more Old Ironsides than the HMS Hood or the Titanic.

And while Griffin might be unsinkable and unflappable, he apparently is passionate too. An encounter Griffin had with Andrew Ross Sorkin at the recent Milken Conference reveals a bit about the reclusive man at the helm of Citadel:

Kenneth C. Griffin, who runs one of the biggest and most successful hedge fund firms, has a blunt assessment: “We, as an industry, dropped the ball.”

The breakdown happened, Mr. Griffin contends, when big investment banks gambled away money and jobs during the late great credit boom. The bosses let all those young gung-ho traders take far too many risks and now everyone is paying the price.... “As an industry, we have a responsibility to manage risk in a way that is prudent,” Mr. Griffin said matter-of-factly New York Times

Griffin is not directing all of his ire at the SellSide; regulators share some of the blame he is dishing out. And 29-year old traders, who are not as clever as they think they are.