NEW YORK The U.S. Securities and Exchange Commission (SEC) is expanding an effort that allows its staff to search massive amounts of data for signs of insider trading and other securities violations, a person familiar with the matter said.
The SEC is awarding a five-year, $90 million contract to privately held Palantir Technologies to provide software for the detection program, the person said.
The SEC, which did not immediately respond to a request for comment on Wednesday, has undertaken multiple large data projects as it tries to keep up with the technological capabilities of Wall Street traders.
The regulator said in February 2014 that it had embarked on a multiyear, $13 million deal to use Palantir's technology. The latest contract is an expansion of that pilot program, the person familiar with the matter said.
Divisions across the SEC are working on the effort to search huge volumes of data for potential violations, such as insider trading, pyramid schemes and "pump and dump" attempts in penny stocks, the person said.
Closely held Palantir, based in Palo Alto, California, was co-founded by Peter Thiel, the billionaire tech mogul who also co-founded PayPal Holdings Inc (PYPL.O).
The source did not specify what information would be harnessed by the platform under the current deal. In the past, Palantir has helped the SEC compare trading records to personal information from other databases to understand the relationships among those trading in the same stock.
(Reporting by David Ingram and Emily Flitter in New York; Editing by Cynthia Osterman)