ReSimone Foxman of Quartz writes about how the consumer confidence data collected by Thomson Reuters and the University of Michigan is being released to someone early, before its official release, according to research and trading records.
Foxman writes, “The consumer sentiment index is at the center of a lawsuit between Thomson Reuters and Mark Rosenblum, a former employee who sold financial data for the firm. Rosenblum says that while working at Thomson Reuters he spoke to officials at the FBI about the two-tiered data distribution system, because he believed that giving high-frequency traders a head start might violate insider-trading laws. He was fired on August 3, 2012, and in April, he took the company to court for wrongful dismissal.
“In its court filing, Thomson Reuters denies that it fired Rosenblum for bringing up these issues. It also denies his allegation that its practice of giving data to high-speed traders two seconds early gave them a trading advantage, though it doesn’t explain how. The suit is ongoing. Thomson Reuters had not responded to requests for comment by press time.
“However, there are reasons to suspect that data may have leaked out even earlier than this two-second window. Emails obtained by Quartz show that Thomson Reuters employees who were selling financial information to clients had access to the data well before the official release time—as early as 9:00 a.m. ET, nearly an hour in advance. Rosenblum told Quartz that he believes employees with early access might not always have kept that information to themselves, though he could produce no evidence of it. But a look at trading on the markets backs up that suspicion.”
Read more here.
