So how much do you really want to monitor your employees? Many executives and front-line managers have little stomach for hardcore electronic eavesdropping. It seems sort of sinister and underhanded. We wouldn't appreciate our bosses doing that to us. But what if it were a legitimate risk management issue?

Securities Industry Week raises the issue in the context of the trial of Jerome Kerviel (Jerome Kerviel news), the accused rogue-trader at Societe Generale, which wrapped up recently in Paris. Some say that so-called evidence analytics software can raise red flags.

For example, Cataphora, of Redwood City, Calif., offers software to monitor "unexplained changes in an individual's behavior or from the controlled norm--meaning the activities of his immediate colleagues--by analyzing the emails, other digital communications and electronic records for their content as well as their broader context." This includes studying messages and workflow in minute detail to uncover aberrations.

Built by mathematicians, linguists and engineers, the software produces "alerts and data visualizations that can be interpreted by a firm to determine if an executive's conduct needs to be investigated. There are potentially many legal and compliance applications as well as operational risk management and IT. The company is planning a real-time version of its software soon.

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