The Financial Services Authority (FSA) is using complex event processing (CEP) software to monitor transactions as it attempts to find the source of rumours that threatened HBOS last week.
Rumours that HBOS was in financial trouble led to a fall in its share price and risked public confidence in the banking group.
The FSA plans to use its Surveillance and Automated Business Reporting Engine (Sabre), which records all details of share trades in London, to help it identify any parties involved in the rumours by piecing together electronic evidence of suspicious share trades.
"We are using Sabre to scan transactions and trades for the last two weeks or so," said an FSA spokesperson.
The system uses Sun Ultrasparc 4+ servers running SAS Enterprise Intelligence Platform, AMD Opteron servers running Progress Software's Apama for Alerting, and Oracle and KX Systems' KDB+ relational databases.
Monitoring trading activity over the past two weeks will help the FSA identify parties that could have benefited from the fall in HBOS share price before launching more targeted investigations.
Bob McDowall, analyst at TowerGroup, said Sabre can help establish evidence and circumstances but cannot prevent people trying to distort the market.
"You can use technology to trace the source of rumours if they were spread through technology because there will be email and telephone trails. If the rumours were word of mouth Sabre can look at market activity and attempt to identify people that are potentially gaining from rumours."
He said it will be interesting to see what Sabre unearths and whether it will be a deterrent in the future.