December 12, 2018 Article

The Digital Revolution’s Impact on Trading and Trading Investigations

By Lilly Goldman and Anne Gron

Advances in communication and computing brought on by the digital revolution have changed the nature of financial instruments and markets. The expansion of electronic trading, increased access to trading data, and innovations in trading technologies have enabled algorithmic trading, facilitated new trading strategies, and contributed to increased trading activity.

In response to these changes in strategy and activity, regulators, exchanges, and compliance departments have gone high tech in their surveillance and investigation efforts. With access to more data, parties can explore complex theories about how markets function and screen for potential wrongful conduct. The increased electronic data and accompanying variety of surveillance technologies mean that things that previously were not captured—conversations, negotiations, unconsummated transactions—can now be captured and explored with more precision. As a result, the digital revolution has made investigations and litigation more data-intensive and complex.

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