Chairman Schapiro recently announced several technology enhancement initiatives that are designed to improve the SEC’s enforcement efforts and business practices. These initiatives were certainly designed to enhance the SEC’s ability to monitor activity to bolster its quiver of ammunition against improper activity.
Among other things, the SEC implemented new search capabilities that permit SEC staff to conduct more intuitive and and focused searches. This new system will also assist the SEC with identifying links between documents and disparate data. The SEC plans to ultimately link this system with other tools, such as audio-searching technology. This technology will allow the SEC to find relevant communications between brokers and customers without forcing the SEC to review hours and hours of audio files. The SEC is also testing technology that allows it to graph phone lines or lines of trading data into a visual schematic, which allows the SEC to find hidden relationships.
In other words, this developing technology will make the SEC more efficient in its surveillance capabilities. This is born out by the fact that the SEC is already using some of this technology in its current enforcement cases. In this day and age of tight budgets, the SEC has been forced to become leaner and meaner through the use of new and improved technologies. We should expect that the SEC will continue to roll out enforcement cases based upon information learned through this new technology. Just remember, the SEC is watching and listening.