Skip to content
Subscriber Only
Opinion
The Editors

How to Use Statistics to Seek Out Criminals

The discovery of banks’ efforts to manipulate the London interbank offered rate owes a lot to statistical techniques that provided the first indications of wrongdoing. If regulators want to uncover more misdeeds in the markets, they’ll have to use such tools much more actively than they currently do.

Academics and journalists have become adept at employing statistical screens to shed light on a wide range of questionable or illegal activities in the financial markets. Notable examples include collusion among Nasdaq stock dealers, the backdating of stock options and possible insider trading among corporate executives.