Red alert: how Nasdaq’s Smarts became surveillance blind spot

Software that looks for shifty trades has been asleep on the job, affecting alerts for hundreds of products On July 8, users of Nasdaq’s Smarts software received an email. It said – not in these words – that the software had not been doing its job.That’s a problem, because Smarts has a big job. The software promises to help market participants spot suspicious trading behaviour – spoofing, frontrunning, insider trading and more – that could be illegal. Firms that do not properly monitor their trading may Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe You are currently unable to print this content. Please contact info@risk.net to find out more. You are currently unable to copy this content. Please contact info@risk.net to find out more. Copyright Infopro Digital Limited. All rights reserved.You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.If you would like to purchase additional rights please email info@risk.net Sorry, our subscription options are not loading right now Please try again later. Get in touch with our customer services team if this issue persists. New to Risk.net? View our subscription options If you already have an account, please sign in here. You already have an account with one of the websites below that uses this email address. Risk.net, FX Markets.com, WatersTechnology.com, Central Banking.com, PostOnline.co.uk, InsuranceAge.co.uk, RiskTechForum.com and Chartis-Research.com. Please use your existing password to sign in. Model risk Model risk managers see growing regulatory divergence Risk Benchmarking study finds most banks expect easing of model risk supervisory scrutiny in the US, but tightening in Europe 24 Jul 2026 Risk management US Basel III will provide reprieve for clearing, but no release Worst excesses of original endgame proposal avoided, but increased capacity still seen as unlikely 23 Jul 2026 Risk management Clearing members want more from HKEX on collateral rates The CCP has cut handling fees on posted margin, but is still paying members less than global peers 23 Jul 2026 Model risk Many banks do not document failure plans for Tier 1 models Risk Benchmarking: Strong predeployment validation gives way to ad hoc escalation of breaches, even at some large lenders 22 Jul 2026 Risk management Governing AI execution as institutional infrastructure Report drawn from discussions at a Risk.net AI governance roundtable, convened in collaboration with Cisco, held in New York in June 2026 21 Jul 2026 Sponsored content Risk management Agentic AI set to drive end-to-end automation of MRM workflows Risk Live: Validator role likely to shift towards oversight and expert judgement 20 Jul 2026 Sponsored content Model risk Model risk managers are being asked to do more with less Risk Benchmarking study finds function being handed expanding AI workload, on flat resources 20 Jul 2026 Model risk Banks are automating GenAI testing, but scope varies widely Risk Benchmarking: LLM-as-judge offers model testing at scale, but few lenders use it to facilitate autonomous sign-off 17 Jul 2026 Most read articles loading... Back to Top