The SEC needs to impliment electronic monitoring methods that are programmed with a set of rules that generates a list each day of likely violators based on their trading activity and trading patterns.
Those on the list should be required to provide documented proof that their trading activities that day that produced the suspicious patterns were legal. If they do not respond in a timely manner they should receive a substantial and automatic fine for not responding.
Just the fear of having to fully document suspicious trading activities or face an automatic fine should eventually prevent them from engaging in activity that causes suspicious trading patterns to show up.
I an sure this type of solution would never be accepted by the SEC because it is just too simple. I am sure if the solution is under 2000 pages, they would probably never give it a second thought.
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