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Artificial Intelligence Exposes Traders Who Used Poker Games to Make Illegal Trades

Written by:
Guest
Published on:
Mar/27/2017

  • Following each poker night, there would be a spike in profit and loss statement
  • Illicit activity was eventually uncovered two years after authorities began their investigation
  • Only the AI was able to recognize behavior that strayed from the norm
  • "A poker night would have never got flagged as you didn't know you should be looking at it as something suspicious," head of company overseeing AI admits

According to an exclusive CNBC report, traders from major investment banks used Texas Hold’em games to make illegal trades.

After every poker night, there would be a big spike in the profit and loss (P&L) statement for the traders involved because they would be colluding and tipping each other off about trades, the CNBC report noted.

The activity occurred in 2013 but wasn’t uncovered until two years later when those banks were under investigation by authorities.

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Ultimately it was artificial intelligence that drew the link between those poker nights and the alleged collusion.

From CNBC:

Behavox is a U.K. start-up that uncovered the wrongdoing. Its software can link seemingly unrelated things to help compliance staff within financial organizations find rogue traders, by recognizing behavior that strays from the norm.

Its compliance standards are certainly impressive, not to mention, quite the deterrent to those even considering engaging in future illegal trades.

These include, but are not limited to:

Holistic platform for all data types that applies advanced algorithms to voice and text.

Powerful search across all data types based on sophisticated logic.

Behavioral profiling to help find unknown unknowns.

Combination of metadata and content data to reveal instant context and aid investigations.

99 percent reduction in false positives compared to any legacy system on the market.

10 times increase in discovery of true positives.

"A poker night would have never got flagged as you didn't know you should be looking at it as something suspicious," Erkin Adylov, chief executive of Behavox, told CNBC in an interview.

"The relationship between the people involved is the reason we flagged it. The three people who kept playing poker were very close and seem important, i.e. there seemed like there was a business relation. The fact that these guys spent a ton of time playing poker when they were clearly busy was the first thing we highlighted. When you analyzed P&L and overlaid one data set with another, there was a big spike in P&L after the poker night. When we highlighted, the compliance guys were able to connect the dots and found it was a case of collusion."

- Aaron Goldstein, Gambling911.com

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