Mantas Brings Proven Expertise to Mutual Fund Challenges

Ninety-five million Americans invest seven trillion dollars in mutual funds. For many of those 95 million, plus countless financial advisors, investors, traders and administrators, the mutual fund industry is now synonymous with the seemingly endless barrage of scandals that have rocked the industry's foundation.

Wrongdoers leave behind an electronic trail of data. That data reveal the story of their fraud by recording critical events, such as deposits, withdrawals, wire transfers, account openings, changes in power of attorney, trades, orders, and quotes. The wrongdoers also may use many separate entities to carry out their schemes, establishing accounts under different names using a variety of financial products such as insurance policies or securities, and employing different traders. Data about these events and entities is captured. And data is also captured about when these events take place. The order in which events take place is extremely important, often spelling the difference between fraudulent or innocent behavior.

The key to behavior detection technology is its ability to identify suspicious events and entities that build over time, separate them from normal everyday events, and then to zero in on the wrongdoers. Without this sophisticated technology, it is likely that many suspicious behaviors will go undetected for long periods of time or not be uncovered at all.

Behavior Detection Technology: A tool made for the times

The pace of change in the financial industry has been staggering. While robust technologies have been deployed to power the business side for some time, the value of robust technology solutions for compliance and surveillance purposes has only gained wider recognition in the last five years.

There's been a dangerous technology gap in compliance that is only now being recognized and closed. Fantastically expensive financial scandals and the threat of terrorist financing have provided the impetus for utilizing behavior detection technologies. These technologies give compliance officers and their staff a new tool for a new generation of problems, a tool that can pinpoint the bad behaviors hidden among billions of bits of data. Behavior detection technology can bring greater levels of protection to not only investors and their firms, but to compliance officers who are increasingly responsible and accountable for implementing effective, proactive, and comprehensive compliance systems.

Breakpoints violations, best execution failures, late trading, and illegal market timing can be substantially reduced and detected if the right technology is partnered with the right compliance system. These violations have cost investors billions of dollars in losses and hundreds of millions in fines and restitution payments to customers. Unfortunately, it appears that some firms have been penny wise and pound-foolish when it comes to putting in place the systems that can protect investors and save firms from massive liabilities. Hopefully, this will change as the industry and regulators gain a greater appreciation for the leading role that robust compliance systems can play in reducing frauds and restoring the trust of investors in the financial industry.

For more information about Mantas products please call 1-866-4MANTAS or visit our website at www.mantas.com.

Mantas
90 Park Avenue, 16th Floor
New York, NY 10016

Contact: Patrick Gagnon
212-786-7482
[email protected]
www.mantas.com

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