Not too long ago, an investment manager looking to invest in a company might conduct due diligence, attend investor relation calls, peruse quarterly or annual filings, and consider standard ratios such as price to earnings and debt to equity. Today, such an investment manager might supplement this fundamental analysis with data analytics on a range of topics; for example, the company’s supply chains, shipping routes, consumer credit card transactions, social media mentions, and employment trends, to forecast earnings, growth prospects, and long/short opportunities (such information typically referred to as “alternative data”).

Today’s computerized and mobile world generates countless gigabytes of data every second, and those seeking an informational advantage in the markets have taken notice. Data sources can be mined for insights not apparent to other market participants. Regulators have taken notice as well, because the use and possible informational advantage of such alternative data sources and “dark analytics” raises some very thorny questions regarding propriety, privacy, fairness, and ethics.