OLD Media Moves

Thomson Reuters gave data to 16 firms early

September 6, 2013

Posted by Chris Roush

Matt Taibbi of Rolling Stone writes that a whistleblower complaint has been filed to the SEC identifying 16 of the world’s biggest banks and hedge funds as the allegedly even-earlier recipients of key economic data from Thomson Reuters. The complaint alleges that this select group of customers received the data anywhere from 10 minutes to an hour ahead of the rest of the markets.

Taibbi reports, “The identity of these 16 firms has not been made public yet, but sources describe the firms as major financial institutions, many of them well-known to the general public. Their inclusion in this case would significantly expand the scope of the scandal.

“Contacted by Rolling Stone today, the SEC declined to comment on the status of the case.

“This is a complicated story and some background is probably necessary to explain what’s going on.

“The case became public thanks to a wrongful termination suit filed in April by a former Thomson Reuters employee named Mark Rosenblum. Rosenblum sold financial data for Thomson Reuters between 2005 and 2012 (he also had previously worked for the firm between 1998 and 2000). During the course of his job, Rosenblum became aware that Thomson Reuters was distributing access to a set of key economic numbers, the University of Michigan Survey of Consumers, in what he thought was an unusual fashion.

“The survey, which gauges how American consumers feel about the economy, is an important indicator that financiers look at when making investment decisions about the U.S. economy. Among other things, the Federal Reserve looks at the Michigan Survey when it determines monetary policy. Any investor who knew the survey results in advance would have an inside advantage over other investors in the market.

“Rosenblum learned that his employers at Thomson Reuters, who had a contract with the University of Michigan to release the data, were releasing the data in three “tiers.”

Read more here.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.