Insider trading risk management

• US 20040193532A1
• Filed: 02/10/2004
• Published: 09/30/2004
• Est. Priority Date: 03/20/2001
• Status: Abandoned Application

• Current Assignee: Regulatory DataCorp, Inc. (Moody's Corporation)
• Original Assignee: Regulatory DataCorp, Inc. (Moody's Corporation)
• Inventors: Lawrence, David
• Application Number:
  US10/775,868
• Publication Number:
  US 20040193532A1
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Methods and systems are disclosed for facilitating the detection and reporting of insider trading activities. Digital information related to one or more financial transactions is received into a computer and rules are created that relate the digital information to insider trading laws. An indication that that execution of the financial transaction is in violation of one or more of the insider trading rules is generated by the computer. The digital information can include, for example, supporting documentation for the transactions. An action responsive to a particular legal violation can also be generated. In some embodiments, an indication to block execution of the one or more financial transactions can be generated and transmitted. A legal authority involved in enforcing insider trading laws can also be apprised of a potential violation of a law which relates to the execution of the financial transaction.

Claims

1. A method of facilitating monitoring of a transactions for one or more indications of insider trading, the method comprising:

receiving digital information related to one or more financial transactions into a storage of a computer device;

creating rules which relate the digital information to insider trading rules in the computer storage; and

generating an indication that execution of the financial transaction is in violation of one or more of the insider trading rules.

2. The method of claim 1 wherein the digital information received comprises supporting documentation for the transactions.

3. The method of claim 1 wherein the indication of an amount of risk comprises a normal range of risk and an elevated amount of risk and the method additionally comprising the steps of:

determining a particular legal violation associated with an elevated level of risk; and

generating an action responsive to the particular legal violation.

4. The method of claim 1 wherein the method additionally comprises the step of transmitting an indication to block execution of the one or more financial transactions.

5. The method of claim 1 wherein the method additionally comprises the step of notifying a legal authority involved in enforcing insider trading laws of a potential violation of a law related to the execution of the financial transaction.

6. The method of claim 1, wherein the digital information is received from at least one of:

(i) a bank, (ii) a broker dealer, and (iii) a national trading exchange.

7. The method of claim 1 additionally comprising the steps of:

analyzing the stored data for patterns of behavior indicative of insider trading; and

automatically generating a suggested action based upon the data.

8. The method of claim 7 wherein the suggested action comprises conveying an insider trading report to a government entity.

9. The method of claim 7 wherein the suggested action comprises initiating a risk management clearinghouse search.

10. The method of claim 7 wherein the suggested action comprises monitoring an associated account for a pattern of activity that may be indicative of a violation of a insider trading law.

11. The method of claim 7 wherein the suggested action comprises monitoring actions taken by an entity associated with the financial transaction for a pattern of activity that may be indicative of a violation of an insider trading law.

12. The method of claim 7 wherein the suggested action comprises refusing to perform a requested transaction.

13. The method of claim 7 wherein the suggested action comprises closing an account associated with the financial transaction.

14. The method of claim 7 wherein the suggested action comprises generating an insider trading report comprising details of the financial transaction and transmitting the report to a trading exchange associated with the financial transaction.

15. The method of claim 14 wherein the insider trading report is transmitted via electronic mail.

16. The method of claim 14 additionally comprising the steps of:

storing a record of the date and time of the transmission; and

storing a record of a destination of the transmission.

17. The method of claim 1 additionally comprising the step of securing the data comprising the insider trading report with at least one of:

(i) encrypting the data, (ii) password protecting the data, (iii) protecting the data with a biometric access procedure, and (iv) refusing to disclose the data except where such disclosure is requested by an appropriate law enforcement or bank supervisory agency.

18. A computer implemented method of facilitating filing insider trading report, the method comprising:

presenting an electronic form for receiving information, wherein the electronic form comprises prompts directed to receiving information related to determining whether insider trading related to one or more transactions as occurred;

receiving data responsive to the prompts;

receiving data identifying documentation supporting potential insider trading activity;

storing the data responsive to the prompts and the data identifying documentation in a computer database;

presenting the data responsive to the prompts and the data identifying documentation to a person designated with determining whether to proceed with the one or more transactions;

receiving an indication to proceed with the one or more transactions; and

generating a communication comprising an instruction to proceed with the one or more transactions.

19. The method of claim 18 additionally comprising the step of:

scrubbing the data responsive to the prompts and the data identifying documentation to obtain additional related data.

20. The method of claim 19 additionally comprising the step of:

automatically initiating a risk management clearinghouse search related to at least one of (i) the data responsive to the prompts, and (ii) the data identifying documentation.

21. The method of claim 20 wherein the risk management clearinghouse search is initiated on a proprietary risk management clearinghouse system.