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SEC Market Abuse Unit Adds Non-Lawyers
December 16, 2011
[ by Melanie Gretchen ]
The SEC is beefing up trade surveillance with a group of non-lawyer trading specialists. Daniel Hawke, head of the 2-year-old Market Abuse Unit, reported that the new personnel would join a new "Analysis and Detection Center," and would complement the Market Abuse Unit's legal team when investigating illegal or harmful trading strategies or patterns.
Who's on Board. The new personnel includes 3 quantitative analysts, 1 trading strategies specialist (former Goldman derivatives trader), and a securities operations specialist. They, along with others in the the A&D Center, will work out of SEC offices in Washington, New York, Chicago, and Philadelphia.
As part of the SEC's Division of Enforcement, which employs between 1,300 and 1,400 people, the Market Abuse Unit was established in early 2010 to address the SEC's failure to understand and police financial crimes like the Madoff scheme. Now made up of 48 investigating attorneys and supervisors, Hawke and his deputy, in addition to the 5-person group, the Market Abuse Unit has expanded its sights.
What the Market Abuse Unit does. Following the May 6, 2010 "flash crash," its scope has transitioned from focusing on abuses related to order routing and execution, to investigating exploitation of market structure and other abuses. To date, they've initiated some 20 investigations since then - most recently, one that ended with the SEC sanctioning exchange operator Direct Edge related to overfilled customers' orders, millions in losses, and a system outage.
[Traders Magazine, 12/9/11]

