The SEC has a special technology fund that enables it to sniff out suspicious activities in financial markets:
“Among the SEC’s most ambitious undertakings is software that streams real-time trade data. The technology enables the SEC to reconstruct market events, a need that became clear after the 2010 “flash crash” in which the Dow Jones industrial average plunged before bouncing back in minutes. It took the SEC four months to unwind the billions of orders that took place that day and determine what happened. The money for that project came from the $50 million fund, agency officials said. More recently, the agency began using software that scans the financial statements companies file, assesses risk factors and generates a score that identifies outliers within a peer group. The SEC also wants to enhance a system that flags potential insider trading by identifying individuals who trade in unison around certain market events, and another that aims to combat hedge fund fraud by sniffing out unusual fund performance.”
The US Congress in the latest budget approved last week has cut the SEC's technology fund in half.
