MFDF - Mutual Fund Directors Forum - SEC Uses Computer Analysis to Identify Fraud in Mutual Funds test

Member Login

Request an account

Sample Banner 2

SEC Uses Computer Analysis to Identify Fraud in Mutual Funds

The Wall Street Journal recently reported on the SEC's use of computer analysis to detect fraud in mutual funds.  In 2009, the SEC began developing a computerized system to analyze the monthly returns from thousands of hedge funds.  According to the Wall Street Journal, "[o]fficials won't say exactly how it works or how much it cost to build, but the agency has announced four civil-fraud suits filed as a result of what it calls the 'aberrational performance initiative.'"  SEC officials are now widening their use of the system to cover mutual funds and private equity funds.  The SEC uses the computerized system to identify funds with suspicious performance numbers, at which point asset-management enforcement unit personnel take a closer look at the fund.  It appears that a number of probes of private equity funds and mutual funds center around excessive valuations of funds' holdings.

The article can be found here (subscription required).


  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag