AI to expose unscrupulous bankers

Posted on 9 Apr 2009 at 17:36

British computer scientists are developing a super computer which they claim will be able to detect insider trading (using advanced knowledge of a company's actions to make money) within the stock exchange almost instantly.

Researchers at the University of Sunderland are using artificial intelligence combined with financial analysis techniques to track suspicious share dealing.

Dr Dale Addison, project manager for the CASSANDRA project (Computerised Analysis of Stocks and Shares for Novelty Detection of Radical Activities) explained that the system will analyse the movement of stocks and shares for specific companies, and monitor popular news wires to detect any suspicious trades.

"The CASSANDRA system looks at the news stories which may affect a particular company. So if two companies are in the process of a merger and someone gets wind that the merger isn??t going ahead, a key player will go out and buy or sell stock shares and make a killing on the markets," he said. "Using our system that information may be detectable by analysis of news."

According to the Financial Times, as many as 25 per cent of UK share dealing may be tainted by insider trading, while a study commissioned by the New York Times suggested that up to 41 per cent of US deals are similarly affected.

"If successful, CASSANDRA will make it more difficult for unscrupulous traders to make a killing on the stock market at the expense of others," said Addison.

Author: Dawinderpal Sahota

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