Project Counsel had a very interesting post yesterday about a new Securities and Exchange Commission (SEC) quantitative analytics unit which will be monitoring the algorithmic trading strategies hedge funds and other trading firms now deploy regularly.
As the U.S. financial watchdog, the SEC has its work cut out for it in the face of big data and algorithmic trading strategies. The head of the new unit is Erozan Kurtas, who calls his team members Jedis. The unit was spawned as a result of the 2010 "flash crash" of U.S. stocks. The unit deals directly with trading firms, some of whom are none too happy to be sharing their proprietary formulas with government agents who might one day leave and join competing businesses where they could use what they know.
Regulators are finding that today's trading is developing at a furious pace that outstrips the knowledge of many of the market gatekeepers and raises the risk of manipulation. The Jedis are intended to bring high level knowledge to the fight against those who seek to manipulate markets for their own gain.
All I can say is that the Jedis better keep their light sabers fully charged. The Dark Force will offer a long-standing battle against the Empire's attempt to enforce its laws and regulations.
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