LA Times – The probes grew out of a 25-person hedge-fund task force created by the Securities and Exchange Commission in 2007, which developed a computer program to analyze stock market movements and identify not only suspicious trading but also suspicious relationships between traders, according to people close to the investigations who were not authorized to speak on the record.
The arrests of Contorinis and Stephanou were the first fruits of that technology, those people said. A statement issued by the SEC after Contorinis’ arrest alluded to the new software, saying the case was the “direct result of innovative investigative techniques that the SEC is using.”
With those techniques, the SEC “does not have to rely on traditional methods of looking for a low-level informant to get to a bigger fish,” said Arthur Laby, a professor at Rutgers University’s law school who worked at the SEC until 2006.
