Brooklyn Journal of Corporate, Financial & Commercial Law

First Page



The rapid rise of “big data” has transformed the way that professional investors make investment decisions. In addition, the intersection of the United States federal securities laws and the use of “big data” to inform securities trading lies in uncharted waters. The nuanced and factually-dependent securities laws are far behind industry practices, and the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have remained largely silent on the issue to date. This Note argues that this combination of murky laws and rapidly evolving business practices gives rise to legal and regulatory risk, and that investment managers leveraging “big data” sources may be paying insufficient attention. It is therefore critical that to protect their business and ensure compliance with the laws, investment managers implement robust compliance programs to guard against the risk that their use of “big data” violates the securities laws