Insights from the SEC Lecture on Enforcement and Quantitative Analytics

On Tuesday, April 16, 2024, the McIntire School of Commerce hosted an evening guest lecture called “The SEC Enforcement and Quantitative Analytics.” This recurring event is held each year to examine and share highlights of how SEC regulators investigate potential violations of securities laws and regulations with interested UVA students. This spring’s event featured three SEC officers — Assunta Vivolo, Assistant Director, Division of Enforcement; David Snyder, Senior Counsel, Division of Enforcement; and Jonathan Vogan, Quantitative Research Analyst, Division of Examinations.  Y. Julia Yu, DeShazo Fellow and Assistant Professor of Commerce, organized the event on behalf of the McIntire PwC Center for Innovation in Professional Services (CIPS).

Assunta Vivolo, Assistant Director, Division of Enforcement, Securities and Exchange Commission

Jonathan Vogan, Quantitative Research Analyst, Division of Examination, Securities and Exchange Commission

The program was held at the McIntire School of Commerce and was open to all UVA students interested in gaining insights into the SEC’s enforcement program and its utilization of data analytics.  More than 150 students attended the event in Rouss & Robertson Halls, and enjoyed pizza and networking with each other and the School’s Accounting faculty ahead of the program.

After attending the event, three M.S. in Accounting students from the Commerce School shared their takeaways:

Denise (Nicki) Turner:

The lecture uses unconventional thinking, some from guest lectures and some from students like us. In a world where information travels fast, the SEC has adapted, employing a sophisticated web of tools to uncover these illegal activities.

The SEC’s reach is increasingly vast from the thousands of data about individuals and organizations. By weaving a web of information using social media analysis, scouring public records, and exploring interests and hobbies, they were able to connect the dots in this case and many of their cases. With the power of quantitative analytics and social media forensics, the SEC has cast a wider net, making it increasingly difficult for insider traders to operate in the shadows. This data-driven approach allows the SEC to build strong cases, demonstrating the illegal activity and the connection between the perpetrator and the information source.

After leaving the lecture, I was struck by how interesting the work was. No two cases are the same, and the same tools used in one case may be ineffective in another. Therefore, you must continue to learn, adapt, and remain mentally agile. The work is positively challenging because of the intricacy of every case.

Spencer Edwards:

The speakers established that the standard practices people use to avoid detection while performing insider trades are frequently insufficient. For example, generating smaller profits, trading with non-round amounts, and adding some “distance” between you and your account is not enough. Second, the speakers provided an interesting point about the SEC’s tools and methods to establish whether someone is an insider. They brought up the example of going on someone’s LinkedIn to establish a connection and looking at the employment locations.  Finally, the SEC has broad access to daily trade information and can compare all individual profits to market averages. If someone can continuously beat averages, it becomes more suspicious over time. Once the SEC determines that a certain trade was made with insider information they can then easily look at past trades and frequently determine that other trades were made with insider information as well.

Kale Benyo:

I thoroughly enjoyed the SEC guest lecture and found it very informative. It was nice to listen to firsthand accounts of how they investigate insider trading instead of just reading about it online. I am glad that the guests from the SEC made the lecture interactive for the audience as well by having us determine how we would narrow down suspicious behavior regarding insider trading; it helped me stay engaged and think for myself a bit. The presenters also did a fantastic job of engaging with the audience and making it fun too!”

The PwC Center for Innovation in Professional Services hosted this event.  We are grateful to the Center and the SEC for their time and dedication to promoting innovative and exciting career exploration programming at the McIntire School of Commerce.