Complexity Does Not Necessarily Mean Evil

According to Reuters (via the New York Times), the SEC is building up its New York City office this year, planning to expand by about eight percent with the goal of “catching cheaters” and aggressively going after Wall Street “bad guys.”   The report goes on to note that hedge funds, in their quest to make money, are using complicated derivatives and credit default swaps more and more often. 
 
As someone who tends to be a big-time rule follower, I don’t care much for cheaters or people who take advantage of others (not to imply anyone else really likes those who do), but I am troubled by the implications in this story. 
 
The story implies that complicated financial transactions are somehow inherently designed to cheat and are therefore used by the “bad guys.”  I did a (very short) rotation through the derivatives group when I was in New York, and I can confirm that many derivatives and credit default swaps are, in fact, quite complicated. However, I cannot confirm that any of the projects I saw were designed by or for cheaters or bad guys.
 
There is no doubt that some cheaters and bad guys use complex transactions to hide their nefarious dealings, but this is not transitive.  Complex transactions are not used solely by cheaters and bad guys.  To the contrary, most such transactions are used by regular (albeit usually wealthy) people, who have their flaws, but are generally neither cheaters nor bad guys. 
 
I support cracking down on those abusing the system, and perhaps we can make the system more transparent in a way that both facilitates markets and reduces cheating.  I just don't think it is helpful or productive to view complexity in itself as an evil.  
 
--Josh Fershee