SEC Announces Quant Analysis Unit

The Center for Risk and Quantitative Analytics (CRQA), headed by former deputy chief of the office of market intelligence, Lori Walsh, will focus on risk identification and assessment, as well as data analytics activities. Part of the Division of Enforcement, it will work closely with the Division of Economic and Risk Analysis, scanning information for potential fraud patterns and conducting risk-based investigative activities.

"The best investigative ideas usually come from the grass roots; staff in the field observing the market first-hand," says George Canellos, co-director of the Division of Enforcement at the SEC. "A key objective of the Center for Risk and Quantitative Analytics will be to assist these staff members, bringing them analytical techniques and computing capacity with special expertise in data mining, and help them translate their valuable ideas into timely, thoughtful, and targeted investigations of national scope."

The establishment of CRQA is the latest salvo in the SEC's ongoing attempts to modernize its use of technology, in dealing with advanced forms of trading. A number of regulatory initiatives and staff picks have been made recently, while future efforts include a trade surveillance system developed by a high-frequency firm, named Midas, and plans for a consolidated audit trail to track market activity.