The Libor Defense: Incompetence or Strategy?

Jonathan Mathew was one of several individuals accused of manipulating Libor rates between 2005 and 2007, alongside Stylianos Contogoulas, Jay Merchant, Alex Pabon, and Ryan Reich. At the time, Mathew was just 24 years old—a junior banker at Barclays still living with his parents. His co-defendants, by contrast, held more senior positions as derivatives traders. From the beginning, Mathew’s defense centered on his junior status and claimed he was merely following orders.

According to his attorney, “No one ever told him what he was doing was wrong. No one ever criticized him.” While arguing incompetence as a legal defense is bold, it doesn’t quite clear his name. That may explain the defense’s recent pivot: rather than simply painting Mathew as naïve, they’re now arguing he was too unintelligent to commit the crime. His lawyer stated bluntly, “Truth be told, Jonathan Mathew is no mathematical genius. He’s not a brilliant man, nor was he cherry-picked by Barclays.”

Ouch. While this may be preferable to a fraud conviction, the long-term consequences are hard to ignore. Imagine trying to explain that in a future job interview:
“Were you the guy involved in the Libor scandal?”
“No, I wasn’t convicted. The court decided I was just following orders… and not particularly bright.”

Wall Street’s Identity Crisis: Growth vs. Purpose

Earlier this month, Harvard Business School Dean Nitin Nohria published an op-ed in The Wall Street Journal titled “Imagine an Economy Without Wall Street.” The article defended Wall Street’s value in response to Vanguard founder John Bogle’s new book, Makers and Takers: The Rise of Finance and the Fall of American Business.

While I haven’t read the book, it’s easy to infer its premise: Bogle argues that as finance has grown disproportionately within the U.S. economy, it has harmed real business development and slowed economic growth. His rebuttal to Nohria emphasized a key point: “What we need isn’t a financial system that’s bigger. What we need is a financial system whose primary function is to support real Main Street business.”

Bogle highlights a growing problem—corporate America’s obsession with short-term profits and stock market performance. Many companies now prioritize quarterly earnings over long-term value creation. When that’s not enough, some turn to creative accounting to mask weak performance. While this isn’t a new issue, it’s refreshing to see thought leaders addressing it with clarity and urgency.

Robo-Advisors 2.0: Now with More Humans?

Remember when robo-advisors were considered disruptive? These platforms, driven by algorithms and modern portfolio theory, were designed to reduce the need for human advisors. Now, E*TRADE has launched a “robo-advisor with a twist”—one that includes human advisors behind the scenes.

Many established firms (like Schwab) and newcomers (like Betterment) have entered the passive, low-cost investment game, prompting some in the industry to ask: Where do we fit in? At Gainplan, we’ve chosen to stand apart by continuing to offer active management. Others are blending in—like E*TRADE.

Typically, robo-advisors use low-cost index funds, reallocating assets algorithmically based on a client’s risk profile. E*TRADE claims its version is different because people—not algorithms—are making the investment decisions. That’s not exactly revolutionary. Many firms still use human managers. The real shift here isn’t about people vs. robots—it’s about fees.

E*TRADE offers two core portfolios: one using higher-cost mutual funds and one using low-cost ETFs. Investors pay 0.30% for the human element, with internal ETF expenses ranging from 0.20% to 0.45%. That totals around 0.75%—far lower than the 1%–2% many traditional advisors charge. The message is clear: fee compression is here, and platforms that don’t adapt may struggle to compete.

At a glance, E*TRADE’s hybrid model feels like more of the same. I’ll continue monitoring it, but so far, it seems less like a revolution and more like a dressed-up version of the status quo.

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