Note: I have the privilege of being a contributor on an upstart blog where some extremely intelligent criticism of Web 2.0 is taking place. It’s called Akahele.org, and I recommend adding it to your RSS reader.
Akahele, if you’re curious, is a Hawaiian word meaning “slow” or “deliberate”, in contrast with wiki, the Hawaiian word for “fast” (and the origin of the “wiki” in Wikipedia).
The following is my most recent contribution to Akahele, and is an examination of the Wikipedia/Gary Weiss saga, with a new twist.
My direct involvement notwithstanding, I feel it’s both fair and accurate to say that the events surrounding the Gary Weiss/Mantanmoreland affair were among the strangest and most polarizing in Wikipedia’s history.
Former business journalist Gary Weiss used multiple sockpuppet accounts to ingratiate himself with Wikipedia’s inner circle and – thanks primarily to the relationships he established there – gain control of, most notably, the article describing an illegal form of stock market manipulation known as naked short selling.
Weiss then proceeded to dramatically alter the content of this and related articles in order to minimize the perceived negative impact of naked short selling while marginalizing critics of the practice, myself included.
There’s strong evidence suggesting Weiss was paid to do this by the very organization many fault as the primary enabler, not to mention a financial beneficiary of, illegal naked short selling.
I suspect most would agree with my assessment that among the darkest moments in the more than two-year drama between Weiss’s arrival and eventual forced departure were those in which Wikipedia co-founder Jimbo Wales injected himself into the controversy – always seemingly uninvited – and always with the effect of derailing whatever progress might have been made toward bringing about Weiss’s removal.
Among these, the most incomprehensible episode occurred at the crescendo of what is widely regarded the largest and most thorough sockpuppeting investigation in the history of Wikipedia, in which dozens of volunteers dedicated hundreds of hours amassing a body of evidence overwhelmingly implicating Weiss in a deeply disturbing deception.
It was at that time that Wales posted an unprovoked indictment of the process under the heading ‘I have personally seen no persuasive evidence’, resulting in Weiss getting another pass. This, despite Wales having told others, privately, that he knew Weiss was guilty; and many more, publicly, that I was a liar for making the same claim.
What follows is my best explanation for Jimbo’s odd behavior.
But first, I need to explain a little more about the nature of short selling, both legal and illegal.
Legal short selling involves selling borrowed shares with the expectation of buying them back and returning them to their owner at a later date and a lower price, allowing the short seller to pocket the difference.
Naked short sellers, on the other hand, sell shares short without borrowing them first, thereby creating the equivalent of counterfeit shares. This has the effect of artificially swelling the supply of stock, which has a markedly depressive influence on price, making the naked short seller rich, while inflicting immense harm upon legitimate shareholders and the companies in which they’ve invested.
There have been, in theory, rules intended to prevent naked short sales from occurring, or at least, from enduring longer than 13 trading days. Unfortunately, the people behind the practice are quite smart, and the monetary incentive to violate the law quite large.
In other words, they’ve found a path around the rules.
And that path runs right through the heart of Chicago’s financial district.
As it turns out, there is a law, known as the “options market maker exemption”, which permits certain brokerages, specifically those registered as ‘options market makers’, to engage in a highly-controlled form of naked short selling in the course of bona fide options market making – comparable to the permission police officers have to exceed the speed limit under certain extreme circumstances when it’s in everybody’s best interest that they do so.
Naked short sellers have discovered that they can essentially “rent” the options market maker exemption from certain corrupt options market makers, producing massive amounts of counterfeit shares in the process.
It’s as though a corrupt cop rented his police cruiser to a random citizen so he or she could drive it around at 120 mph for a day, without being held responsible for any of the damage they might cause.
Of course, it’s silly to think that either the citizen or the cop could get away this, but in the financial world, such overt violations of the law regularly take place on a grand scale. And though the reason is not immediately clear, research proves that this abuse of the options market maker exemption nearly always takes place on the Chicago Stock Exchange.
My guess is that it’s a cultural thing: the same way you’d never even think of bribing a cop who pulled you over in San Diego, while doing the same just 30 miles south in Tijuana is not a big deal.
What does this have to do with Jimbo Wales?
Well it turns out that both he and former Wikimedia Foundation trustee Michael Davis used to work at Chicago Options Associates, where Wales was a research director and Davis was CEO.
To be clear, while it existed, Chicago Options Associates traded options and futures on the Chicago Mercantile Exchange, and was not an options market maker. But because I suspect the Chicago phenomenon is a cultural one, and given the near certainty that Wales counts many equities options market making traders as his friends, I’m not sure it really matters: his professional background is deeply rooted in the same dark corner of the financial world that facilitates the same form of stock fraud Gary Weiss worked so hard to defend on Wikipedia.
Which I suspect explains why Jimbo Wales worked so hard to defend Gary Weiss.
Is Jimbo Wales above influencing Wikipedia content based on his personal relationships?
Rachel Marsden would probably say that no, he is not.
I recently asked Jimbo whether anybody with ties to options market making on the Chicago Stock Exchange sought to influence his decisions in this respect, and was not entirely surprised when Jimbo insisted that they did not.
However I was surprised when Jimbo followed with “it is still to this day completely unproven that the claims you’ve made about Mantanmoreland being Gary Weiss are true.”
Once I’d picked myself up off the floor, I decided to take Jimbo up on his invitation to finally show him the first bit of proof linking Gary Weiss to Mantanmoreland, despite the fact that doing so felt like proving to a skeptic that the moon is not composed of dairy products.
What I ultimately sent Wales were:
|Click to enlarge.|
- A scatter graph (seen at right) showing Mantanmoreland’s Wikipedia editing pattern over several months, including a 12 hour time shift limited to the period in which Gary Weiss was known to be visiting India.
- Email from Gary Weiss (if you want to know how I came to possess Weiss’s private email, read this) in which he told a friend that he intended to edit a specific Wikipedia article to include a reference to a book he wrote.
- A link showing that Mantanmoreland did in fact edit that very article to include a reference to that very book.
I also made it clear that should these bits of evidence fail to convince him, I’m ready to send much, much more.
Maybe Jimbo was convinced and he decided there was no reason to respond further.
Maybe the evidence simply left him speechless.
Or maybe owning up to his reckless actions in this case would prove unpopular with his friends back in Chicago.
All I know is that once the evidence was sent as requested, the conversation went cold.
Whatever the case, the legacy of Gary Weiss’s campaign of misinformation endures on Wikipedia to this day, due in large part to the apartheid-like probationary status imposed upon the naked short selling article after Wales condemned the inquest into Weiss’s activities as having produced no persuasive evidence.
All the while, Wikipedia remains the first option offered those searching the web for information about naked shorting, and its role in the current financial crisis.
Weiss may have created this problem, but Jimbo Wales — whatever his motivation — has allowed it to persist. The time has come for Wales himself to step in, help find a real solution, and acknowledge the damage this dark episode has caused real people in the process.