The Financial Industry Regulatory Authority and the Securities Exchange Commission have begun investigating the strategies and secret computer algorithms of high-trading firms on Wall Street, Reuters reports. FINRA are investigating suspicious market activity, like if there was a surge of trading for a stock that normally doesn't attract that much attention. They're investigating something specific that happened in the market, but they aren't saying what. "It's not a fishing expedition or educational exercise. It's because there's something that's troubling us in the marketplace," said Tom Gira, executive vice president of their market regulation division. The SEC are confiscating the strategies behind the compter code from financial firms, "as part of its authority to examine financial firms for compliance with U.S. regulations, according to agency officials and outside lawyers."
The "flash crash" of May 6, 2010, triggered an upswing in the SEC's interest in hedge funds and brokerage dealers' computer-trading operations. Requests for the companies' computer algorithms' strategies have skyrocketed this year, and some traders are starting to worry the secrets from their little black books are going to be released into the wild. One executive from a high-frequency trading firm told Reuters they would be "disappointed and upset" if the SEC asked them for their information. "I mean, are these people all going to work at the SEC forever?" he asked.