New York attorney general labels early data releases “insider trading 2.0”

Eric Schneiderman
Eric Schneiderman
Image: AP/Mike Groll
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In his harshest words to date on the subject, New York attorney general Eric Schneiderman said that early releases of private, market-moving data to premium subscribers amount to “insider trading 2.0.”

Schneiderman said “small, insidious groups” of ”market manipulators” were unfairly paying for early access to data feeds “in a way that distorts our markets far more than Albert Wiggins or Gordon Gekko could ever have imagined.”

He referred frequently to a story we first reported on back in June, when Thomson Reuters revealed in court documents that it released consumer sentiment data two seconds early to high-speed traders. Those traders paid hefty sums to receive the number at 9:54:58 a.m. ET, instead of 9:55:00 a.m. ET, when normal subscribers received it.

“It is…very much a part of our tradition to seek every legal way to succeed. That’s a good thing,” Schneiderman told investors and journalists today at the Bloomberg Markets 50 summit in New York. But, he said, this kind of advantage compromises public faith in the fairness of the markets. “There’s something about having a starting line that everyone is confident about that is important to me,” he said.

Schneiderman also said that his view of early data releases could extend to analyst research. “Analyst sentiment is market-moving information,” he said, implying that the public should have some kind of simultaneous access to those reports.