Eventus Systems to Add ML-Driven Trader Profile Feature to Validus

The Covid-19 outbreak has sparked a new way of thinking about surveillance, as traders have moved out of the office and into their living rooms. This has also lead to new surveillance tools being released into the marketplace.

Eventus Systems, a software company started in 2015, began trialing the use of supervised machine learning within its flagship Validus platform back in 2018. The aim of the project was to improve the efficiency of its market manipulation detection tools. With that foundation now laid, the Austin, Texas-based vendor is expanding its AI capabilities to include the creation of trader profiles to better monitor an individual’s unique trading patterns.

The Validus risk and surveillance platform currently has hundreds of pre-set trade monitoring parameters built into the system to look for signs of spoofing, layering, wash trading, and other types of market manipulation. The trader profiles, though, would incorporate machine learning to conduct the parameterization process to create risk profiles based off of a trader’s unique trade history.

“You can think of it as the algo or the ML testing out the different parameter settings that will generate a different set of alerts, [and] then not only changing those parameters, but also adding some different types of parameters into the mix, as well,” says Travis Schwab, Eventus’ CEO.

Should a particular threshold for a specific trader be hit in regards to, say, spoofing, the system will automatically alert the appropriate compliance professional to dig into the trade activity more deeply. Trader profiles will be compiled and updated based on the individual’s previous 30 days of activity.

Schwab says the product is currently being tested internally, and the company hopes to go into beta testing soon, with a full release planned for Q4.

“It’s adding a lot more context to enable the client to know where to look. That’s really the focus of the application,” he says.

Building Blocks

In the first quarter of this year, Eventus raised $10.5 million in a Series-A investment round. Investors included a range of venture capital and financial services organizations, led by Chicago-based Jump Capital and Austin-based LiveOak Venture Partners. Also participating in the round were existing customers and investors, including Coinbase Ventures and Chimera Securities.

As a result of that investment, even as the coronavirus pandemic was taking hold in the United States, the company doubled in size including the addition of Perry Barth as CFO, Joseph Schifano as global head of regulatory affairs, Jeff Gale as EMEA sales director, and Dan Burton as vice president of engineering.

The Validus platform—which is targeted at a range of users, from banks and agency brokers, to futures clearing merchants and prop-trading shops, to corporates and buy-side firms—covers equities, equity options, futures, fixed income, FX, and cryptocurrencies.