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FINRA Hires SEC Data Analytics Guru Kurtas for New Post

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The Financial Industry Regulatory Authority announced Wednesday that Erozan Kurtas has been named senior vice president and head of FINRA’s Office of Advanced Data Analytics, a newly created position.

Kurtas, who is currently assistant director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations’ Quantitative Analytics Unit, will start his new FINRA post on Feb. 23 and will report to FINRA Chairman and CEO Richard Ketchum and Executive Vice President for Regulatory Operations Susan Axelrod.

Kurtas will have overall responsibility for enhancing FINRA’s data analytics capabilities and will work closely with departments across FINRA, in particular the Sales Practice and Risk Oversight and Operational Regulation (ROOR) units.

While at the SEC, Kurtas led the development of the National Exam Analytics Tool (NEAT), a software system that allows SEC examiners to analyze systematically large amounts of trading data to detect insider trading, improper allocation of investment opportunities and other misconduct.

SEC Chairwoman Mary Jo White has said that NEAT allows examiners to access and systematically analyze “massive amounts of trading data from firms in a fraction of the time it has taken in years past.”

At FINRA, Kurtas and his team will focus on “improving how FINRA analyzes and uses the data it currently gathers from firms,” the self-regulator says, noting that the Office of Advanced Data Analytics “will look for opportunities to more effectively refine that data to make FINRA an even more efficient regulator.”

FINRA has received significant pushback regarding its controversial plan to collect broker-dealer account data through its Comprehensive Automated Risk Data System proposal, or CARDS. FINRA spokesman George Smaragdis told ThinkAdvisor in a Wednesday email message that FINRA is “now focused on the specific issues raised in the comment letters” regarding CARDS, and that FINRA “intend[s] to address any and all meaningful risks before moving forward” with the data collection plan.

Ketchum said in a Wednesday statement that “it is critical for regulators to use 21st-century data analytics in order to keep up with 21st-century markets,” and that  “building on his pioneering work at the SEC, Erozan and his team will develop cutting-edge data analytics tools to help FINRA better utilize the data we collect in order to fulfill our mission of protecting investors and ensuring the integrity of our markets.”

Prior to joining the SEC in 2010, Kurtas was a visiting scientist at Arizona State University. He previously held positions at Standard & Poor’s, Seagate Technology and Quantum Corp.

He has an MBA from Carnegie Mellon University, and a Ph.D. and MSc. in Electrical and Computer Engineering from Northeastern University. He has published more than 100 scientific articles in peer-reviewed journals and conference proceedings, and holds 20 patents issued by the United States Patent and Trademark Office on algorithms and statistical techniques.

— Check out SEC Focused on ‘Preserving’ Money Market Funds; Resources for Advisor Exams a ‘Crying Need’ on ThinkAdvisor.