> “Using sophisticated data analysis, the SEC was able to uncover this insider trading ring and hold each of its participants accountable to ensure the integrity of our markets,” said Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit.
I think in time the SEC’s enforcement in this area will become more automated and efficient.
The SEC has been gathering data after big price swings to identify potential insider trading for a while but my understanding is that they’re now able to assign an insider-trading risk-score to transactions that made money (or avoided a loss) by trading just before the swing.
What’s interesting is the risk-score seems to involve some degree of “who you know” and seems to de-emphasize the old metric used to prioritize investigations: how big your profit/loss avoided was. So rather than having to identify the big winners (or loss avoiders) and investigate those transactions they can instead focus on the transactions most likely to have been “tipped” by an insider. (This is entirely my own speculation but I think you can see it a bit in the attached press release. It’s an unusual chain of relationships between and among the six people charged and the two public companies. Insider > tips friend > tips guy who owes him money > tips three friends. I’d venture to guess there was some transaction data that allowed the SEC to form the link between the accounts profiting and the insiders because $1.7 million isn't a terribly huge sum to have SEC staff chasing after.)
It also seems, judging by Gensler’s recent comments, they’re considering gathering data about planned and forgone 10b5-1 transactions presumably for the purpose of applying insider trading analytics.
https://www.bloomberg.com/opinion/articles/2021-06-16/don-t-...
You need some way to detect smoke before you can go looking for the fire. And given the large number of trades in the US stock markets, I don't believe this is an easy problem.