The Wall Street Journal reports: Spies are infiltrating Wall Street.
A wave of companies with ties to the intelligence community is winning over the world of finance, with banks and hedge funds putting the firms’ terrorist-tracking tools to work rooting out employee misconduct before it leads to fines or worse.
“Both Wall Street and the intelligence world want the same thing: to find unknown unknowns in the data,” said Roger Hockenberry, the former chief technology officer of the Central Intelligence Agency’s clandestine services and now a partner at the consulting firm Cognitio Corp. in Washington.
“Financial firms aren’t looking for terrorists, but good customers and attempts at fraud,” he said.
The CIA gave many of these companies their big break: After the terror attacks of September 2001, a private-equity arm of the CIA known as In-Q-Tel began seeding companies that could help it sift through vast repositories of data to quickly identify threats. Those skills have become more valuable on Wall Street as firms try to keep up with rogue traders in increasingly complex and rapidly moving markets.
Of 101 companies publicly seeded by In-Q-Tel, 33 have taken on Wall Street clients in recent years, according to a review by The Wall Street Journal. [Continue reading…]