By John McCrank
(Reuters) – Trading software provider Trading Technologies International Inc said on Tuesday it has acquired Neurensic LLC, a startup that uses artificial intelligence for market surveillance and compliance, for an undisclosed amount.
Neurensic’s technology, which allows market participants, exchanges and regulators to examine complex trading patterns to identify risks in real time, along with four of the firm’s employees, have moved over to Trading Technologies, the Chicago-based company said in a statement.
“Artificial intelligence and machine learning are rapidly altering the landscape of trading, and acquiring certain assets of Neurensic enables Trading Technologies to offer AI solutions that no other professional trading platform has offered before,” said Michael Kraines, Trading Technologies’ chief financial officer.
The deal comes at a time when trading firms are looking more and more to advanced technologies like machine learning to not only filter through massive data sets for signals that they can trade on, but also to identify potentially costly manipulative behavior among their own ranks.
Neurensic, which was founded in 2015, has helped regulators on market-manipulation investigations and has had talks with exchanges on supplying artificial intelligence software for surveillance.
The Chicago-based startup last October also launched a tool that creates an “integrity score” for traders based on how their trading patterns match up against patterns regulators have deemed suspicious.
(Reporting by John McCrank in New York; Editing by Matthew Lewis and Steve Orlofsky)