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posted by janrinok on Sunday November 10 2019, @12:18AM   Printer-friendly
from the doesn't-mean-that-it-will-catch-them dept.

Submitted via IRC for SoyCow1337

AI will now watch for fraudsters on the world's largest stock exchange

The Nasdaq stock market is an attractive target for fraudsters. As the world's largest stock exchange by volume, it must be constantly monitored for attempts to illicitly beat the system. These can include manipulations to inflate a stock's closing price; churning (rapidly buying and selling stocks) to give the false impression of a lot of activity; and spoofing (placing a large buy or sell order with no intention of actually executing) to create artificially high demand.

That monitoring is now being aided by artificial intelligence, Nasdaq, the stock market's parent company, announced today. A new deep-learning system is working in tandem with human analysts to keep watch over roughly 17.5 million trades per day.

The system augments an existing software surveillance system that uses statistics and rules to flag any signs of market abuse. In the US equity market, for example, the old system issued around 1,000 alerts per day for human analysts to investigate, says Martina Rejsjo, the head of market surveillance for Nasdaq's North America equities. Only a fraction of these cases would subsequently be confirmed as fraud and result in heavy fines.

The new system should have a number of advantages. First, Nasdaq claims it will be more accurate at identifying patterns of abuse, reducing the burden on human analysts. Second, it will be better at detecting more complex patterns of abuse, particularly spoofing, which Nasdaq believes will become increasingly common.


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  • (Score: 2) by Thexalon on Sunday November 10 2019, @03:19PM (1 child)

    by Thexalon (636) on Sunday November 10 2019, @03:19PM (#918608)

    Just follow the activities of JP Morgan, Goldman Sachs, and Bank of America, and you'll have the 3 biggest sources of fraud on Wall Street.

    But I'm sure what they're after is the small-timers.

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  • (Score: 0) by Anonymous Coward on Sunday November 10 2019, @08:20PM

    by Anonymous Coward on Sunday November 10 2019, @08:20PM (#918683)

    Not sure I would call it fraud. I would call it more 'doing the needful'.

    They hire *very* junior devs then have them handling trillions of dollars. Mistakes are made. Lots of them.

    Fraud would take someone sitting down and thinking about it. You do not get that off of stackoverflow.