December 6, 2021

Volume XI, Number 340

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December 03, 2021

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The Securities And Exchange Commission (SEC): Big Data & Surveilance

In our discussion of the Securities & Exchange Commission’s (SEC) actions over the past year, we described how the SEC is ramping up enforcement of its pay-to-play restrictions.  We also pointed out an acknowledgment by an agency enforcement official that the agency is “actively looking” for violations and that the agency does its own “surveillance.”

 

 

What kind of surveillance?  We previously noted that data analytics or “big data” are likely being used by Department of Justice and the Federal Bureau of Investigation to identify potential illegal campaign finance activity.

Now the SEC has confirmed that it uses data analytics for its own enforcement purposes.  In an announcement of its 2015 examination priorities, the SEC trumpets its ability to “analyze large amounts of data efficiently and effectively” and promises that big data will be used “to focus on registrants and registered representatives that appear to be engaged in illegal activity.”

It is likely the SEC is using, in one form or another, similar data analytics to identify potential violations of its “pay-to-play” rule, which regulates political contributions and fundraising by registered investment advisers.  We are entering a world in which an errant contribution is increasingly likely to be caught by regulators using big data.

 

© 2021 Covington & Burling LLPNational Law Review, Volume V, Number 20
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About this Author

Kevin Glandon, Insurance litigation attorney, Covington
Associate

Kevin Glandon represents clients in complex, high-stakes litigation, primarily as an advocate for policyholders seeking recovery. He also aids clients in responding to congressional investigations and counsels clients regarding sensitive and nuanced questions of political and election law in civil, criminal, ethics, and internal investigation matters.

Mr. Glandon’s expertise in political and election law includes the Federal Election Campaign Act, the Securities and Exchange Commission’s pay-to-play rules, Senate and House ethics rules, and numerous state and...

202-662-5003
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