Thomson Reuters to Suspend Early Data Survey Release
Thomson Reuters Corp. (TRI) will suspend the early release of a consumer survey to select traders as part of an agreement with the New York Attorney General’s office, which is probing the matter.
New York Attorney General Eric Schneiderman is investigating the release of the Thomson Reuters/University of Michigan index of consumer sentiment to high-frequency traders two seconds ahead of other Thomson Reuters subscribers, the state said today.
The two-second advantage is enough time for traders to take “unfair advantage” of access to the information, the attorney general’s office said in a statement.
“The securities markets should be a level playing field for all investors, and the early release of market-moving survey data undermines fair play in the markets,” Schneiderman said.
Thomson Reuters is fully cooperating with the review and at the request of the attorney general will simultaneously distribute the survey to clients at 9:55 a.m. effective July 12, Lemuel Brewster, a company spokesman, said in a statement.
Thomson Reuters made the change voluntarily at the request of the attorney general, Brewster said.
“Thomson Reuters strongly believes that news and information companies can legally distribute non-governmental data and exclusive news through services provided to fee-paying subscribers,” Brewster said in his statement.
Thomson Reuters’s agreement to discontinue the release two seconds early removes a “prior distortion in the markets,” the attorney general’s office said. It will remain in effect while the state investigates, Schneiderman spokeswoman Melissa Grace said.
Bloomberg LP, the parent company of Bloomberg News, competes with New York-based Thomson Reuters in providing financial news and information. Bloomberg publishes a Consumer Comfort Index.
The University of Michigan data had been released bimonthly in three tiers, according to a lawsuit filed by a former Thomson Reuters employee. The first release to some subscribers occurred at 9:54:58 a.m., followed by the release at 9:55 a.m. to what the company calls desktop subscribers and then the release to the public at 10 a.m., according to the complaint.
The first release gives those subscribers a head start to trade on the information, according to the former employee, Mark Rosenblum.
Rosenblum said in the complaint that he believed the tiered distribution violated insider-trading laws, and in June 2012, he contacted the Federal Bureau of Investigation and Thomson Reuters executives. He said in his complaint that he was fired in August that year.
When the lawsuit was filed, Thomson Reuters said the accusations were “unsubstantiated and without merit.”
The Rosenblum case is Rosenblum v. Thomson Reuters (Markets) LLC, 13-cv-02219, U.S. District Court, Southern District of New York (Manhattan).
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