Failure By Design

Did you know the Security and Exchange Commission (SEC) is now collecting 400 gigabytes of market data daily?

Midas [Market Information Data Analytics System], which is costing the SEC $2.5 million a year, captures data such as time, price, trade type and order number on every order posted on national stock exchanges, every cancellation and modification, and every trade execution, including some off-exchange trades. Combined it adds up to billions of daily records.

So, what’s my complaint?

Midas won’t be able to fill in all of the current holes in SEC’s vision. For example, the SEC won’t be able to see the identities of entities involved in trades and Midas doesn’t look at, for example, futures trades and trades executed outside the system in what are known as “dark pools.” (emphasis added)


The one piece of information that could reveal patterns of insider trading, churning, and a whole host of other securities crimes, is simply not collected.

I wonder who would benefit from the SEC not being able to track insider trading, churning, etc.?

People engaged in insider trading, churning, etc. would be my guess.


Maybe someone should ask SEC chairman Elisse Walter or Gregg Berman (who oversees MIDAS) if tracking entities would help with SEC enforcement?

If they agree, then ask why not now?

For that matter, why not open up the data + entities so others can help the SEC with analysis of the data?

Obvious questions J. Nicholas Hoover should have asked for SEC Makes Big Data Push To Analyze Markets.

One Response to “Failure By Design”

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