Legal Alerts

Schapiro Discusses SEC’s Upgrades in Agency’s Enforcement Technology

10.23.12

Last week, at the 2012 New England Securities Conference, Securities and Exchange Commission Chairman Mary L. Schapiro discussed the agency’s efforts to upgrade its investigative technology. “Upgraded technology makes it possible to wade through literally millions of documents and thousands of hours of conversations to find the proverbial needle in a haystack that lets us sew up a case,” said Schapiro.

According to Schapiro, the SEC’s  technology update efforts are multi-faceted, including but not limited to:

  • A new e-discovery system that will provide faster access to information and more intuitive data search options;
  • Advances in audio-searching technology, allowing enforcement staff to conduct phonetic searches of voice recordings;
  • The implementation of the Automated Bluesheet Analysis Project, a program enabling the agency’s enforcement staff to use newly-developed analytics to identify suspicious trading patterns and relationships among multiple traders and across multiple securities.

Though the SEC’s technology initiative is still in its early stages, it has already proven itself effective, noted Schapiro. Schapiro credited the Bluesheet program with building the agency’s case against Matthew Kluger, a former attorney, and his co-conspirator, Garrett Bauer, involving an insider trading scheme spanning two decades and netting over $32 million. “At first, investigators were unaware either of Bauer or the middleman’s relationship with Kluger,” said Schapiro, “but parallel analysis of the Bluesheet trading data led us to identify the middleman and uncovered Bauer’s relationship with him.”

According to Schapiro, these advancements and upgrades in technology will lift the agency’s performance, elevating the efforts of the enforcement staff to the highest level of effectiveness the SEC has ever experienced.

To access a full transcript of Schapiro’s remarks, please visit 
http://sec.gov/news/speech/2012/spch101112mls.htm

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