SEC Data Collection to Fuel Cases, Challenge Defendants

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By Yin Wilczek

Sept. 11 — The Securities and Exchange Commission is ramping up its use of data analytic tools in a fashion that ultimately could pose problems for companies and registrants, attorneys and other commenters said Sept. 11.

The massive amounts of data the SEC now is collecting will fuel future enforcement cases, and such cases will be especially difficult to defend against, they said during the American Bar Association's Business Law Section meeting in Chicago.

Elizabeth Gray, a partner in Willkie Farr & Gallagher LLP, Washington, noted that in some areas, the defense bar is seeing massive document requests from the SEC. The staff is exercising “a lot less discipline,” Gray said. “The process in that has gotten slightly out of hand.”

Carmen Lawrence, a New York-based partner in King & Spalding LLP and a former director of the SEC's Northeast Regional Office, also said the staff has become less willing to negotiate down the scope of the SEC's data requests in terms of relevancy. With the new tools, the staff now has the ability to very quickly scan through the information to obtain what is necessary. The remaining data “could be useful for them in the future,” she said. It is now “all about amassing data.”

The SEC over the last two years has beefed up its use of data analytics for its enforcement, examination and oversight functions. Earlier this year, SEC Enforcement Director Andrew Ceresney told Bloomberg BNA that his division is using software developed by Palantir Technologies to mine for connections in insider trading and other investigations.

To contact the reporter on this story: Yin Wilczek in Chicago at

To contact the editor responsible for this story: Phyllis Diamond at

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