Are Computers Able to Track and Prevent Stock Fraud and Insider Trading?

There are quite a few forms that securities fraud can take, but most people in the know will recognize the “pump and dump” as the one most commonly seen. Even though this type of scam has become more complex since the advent of the internet, luckily enough, they remain easily spotted. 

For those unfamiliar with the pump and dump, it involves buying a lot of a specific stock in order to inflate the price and then selling while the price is up to make a nice profit. While the price drops, investors are left clueless as to why their investments are suddenly worthless. 

While the pump and dump is the most common, it certainly isn’t the only type of stock fraud out there.

Battling the Fraud

Yes, since the internet has been around, fraud and insider trading have also evolved. However, it is still entirely possible for those things to be tracked and even prevented by the use of computers. One way to learn how to do that is to get a degree in computer information systems.  

This is a rapidly changing field, too. Advances in the analytics of big data, the explosion of mobile computing, and people being on the internet 24/7 has led to massive growth in both the diversity and the amounts of data available. Because of the evolution of IT and the quickly introduced technologies that are game changing, IT professionals are constantly learning new skills. These skills include learning to track and prevent fraud of all types – including stock fraud.

Criminal Justice

Aside from fraud being tracked by IT professionals, there are criminal justice graduates on the case. Regardless of popular opinion, criminal justice graduates work in other fields besides as police officers. There are criminal justice professionals on the staff at the White House, working in nuclear security, and other positions as well as police chiefs and even attorneys. These attorneys include people who are involved with tracking and preventing things like the investment fraud that we have been talking about. 

Someone looking into getting a degree in criminal justice might find a job as a member of law enforcement, somewhere in the court system, something in the penal system, or anything in between those things. That means that even after the perpetrators of investment fraud have been caught, they will still be dealing with criminal justice professionals through their time in court and even their time in prison.

IT and Investing

Just as it is with everything else, information technology is having a hand at reshaping investing. If you take a look at the stock market between the 1950s and the 1980s, you will see that everything there stayed pretty copasetic. Right after the rise of network connectivity on a large scale, though, the market just had a growth explosion.

This trend has continued from then until now. According to experts, this is no coincidence either. The age of the internet has been a major factor in reshaping the landscape of trading due to the fact that all of the players in the investing game have amazing access to more information than ever and this allows them to make decisions that are better informed. 

That said, all of the new technology has also made it quite a bit easier to track investment fraud on a real-time basis. It has also made it easier to prevent.