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16 Major Firms May Have Received Early Data From Thomson Reuters

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http://www.rollingstone.com/politics/blogs/taibblog/16-major-firms-may-have-received-early-data-from-thomson-reuters-20130905

Readers may recall an ugly story that broke earlier this summer, when New York State Attorney General Eric Schneiderman rebuked the news/business information firm Thomson Reuters for selling access to key economic survey data two seconds early to high-frequency algorithmic traders. The story strongly suggested that some Thomson Reuters customers were using their two-second head start (an eternity in the modern world of computerized trading) to front-run the markets.

"The early release of market-moving survey data undermines fair play in the markets," Schneiderman said, back in the second week of July. Thomson Reuters suspended the practice of selling two-second head starts after Schneiderman insisted upon a change. Still, the firm defiantly refused to declare the change permanent and insisted that it had the right to "legally distribute non-governmental data" to "fee-paying subscribers."

It turns out that there's more to the story.

Back in June, journalist Simone Foxman at the global economic site Quartz reported that in addition to the two-second head start some Thomson Reuters customers were getting on the release of the University of Michigan Survey of Consumers, other customers may have been getting their data even earlier, "nearly an hour in advance" in some cases.

Rolling Stone has since learned 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 this key economic data. 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.

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.

...

More at the link.

Whilst the firms names haven't been released I'm sure we could all come up with certain suspects. The game is rigged and proles aren't allowed to play.

I'm sure a few fines will be paid, executives will apologise to congress. They really had no idea this was going on, they just thought they'd hired the cleverest economists who could predict the markets turns out they where cheating.

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http://www.rollingstone.com/politics/blogs/taibblog/16-major-firms-may-have-received-early-data-from-thomson-reuters-20130905

More at the link.

Whilst the firms names haven't been released I'm sure we could all come up with certain suspects. The game is rigged and proles aren't allowed to play.

I'm sure a few fines will be paid, executives will apologise to congress. They really had no idea this was going on, they just thought they'd hired the cleverest economists who could predict the markets turns out they where cheating.

IF it were government data, it would be outrageous. A bit of a grey area for Thomson Reuters info though, how is it obtained? It is information, yes, but is it 'inside information'?

Does any ordinary mortal play the stock market any more? Are there such things as flesh-and-blood stockbrokers?

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"The early release of market-moving survey data undermines fair play in the markets,..

"Undermines".

That's a laugh.

It completely destroys fair play. Fair play is non-existent.

Not only do they get advance warnings but for sure they'll be using QE money that they're first in line for.

And then even with their early warnings and first in line money plus their non-accountability if they lose their bets they get bailed-out by the taxpayer.

"Undermines" :rolleyes:

Edited by billybong

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http://www.rollingstone.com/politics/blogs/taibblog/16-major-firms-may-have-received-early-data-from-thomson-reuters-20130905

More at the link.

Whilst the firms names haven't been released I'm sure we could all come up with certain suspects. The game is rigged and proles aren't allowed to play.

I'm sure a few fines will be paid, executives will apologise to congress. They really had no idea this was going on, they just thought they'd hired the cleverest economists who could predict the markets turns out they where cheating.

As far as I can see it is insider trading. This should be pursued by the police and parties who did not receive this data should be able to sue for loss.

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Guest unfunded_liability

http://www.rollingstone.com/politics/blogs/taibblog/16-major-firms-may-have-received-early-data-from-thomson-reuters-20130905

More at the link.

Whilst the firms names haven't been released I'm sure we could all come up with certain suspects. The game is rigged and proles aren't allowed to play.

I'm sure a few fines will be paid, executives will apologise to congress. They really had no idea this was going on, they just thought they'd hired the cleverest economists who could predict the markets turns out they where cheating.

The day trading game is rigged. A solution: buy quality and hold for the medium to long term.

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The thing is, this early access for data was not even widely known about, so you, me, our pension funds, all got stiffed if we bought or sold near these release times.. It was the fact that it was private which really convinces me they were just out to scalp anyone they could.

There is no doubt about it, they were trading with advance knowledge.

http://www.cnbc.com/id/100810549

Five minutes before that, at 9:55 a.m., the data is distributed on a conference call for Thomson Reuters'paying clients, who are given certain headline numbers.

But the contract carves out an even more elite group of clients, who subscribe to the "ultra-low latency distribution platform," or high-speed data feed, offered by Thomson Reuters. Those most elite clients receive the information in a specialized format tailor-made for computer-driven algorithmic trading at 9:54:58.000, according to the terms of the contract. On occasion, they could get the data even earlier—the contract allows for a plus or minus 500 milliseconds margin of error.

When you see this video, you realise that successful trading these days boils down to knowing how to break a market, induce latencies and crossed bids/offers, and then exploiting that.

TBTF banks are a cancer. It's why I buy gold.

From the "About the Video" section:

Set to lowest resolution for an "artistic rendering", or highest resolution for science.

The animation tool that created this video was written in "C" using Windows GDI - simple lines, polygons and ellipses. We wrote it to explain to the SEC and CFTC (the regulators) how our markets work. We got the idea after realizing, in face to face meetings with them, they didn't understand market structure or the importance of latency and the consolidated feed. That was several years ago. We still aren't sure if they get it, or are just playing dumb.

The bottom box (SIP) shows the National Best Bid and Offer. Watch how much it changes in the blink of an eye.

Watch High Frequency Traders (HFT) at the millisecond level jam thousands of quotes in the stock of Johnson and Johnson (JNJ) through our financial networks on May 2, 2013. Video shows 1/2 second of time. If any of the connections are not running perfectly, High Frequency Traders can profit from the price discrepancies that result. There is no economic justification for this abusive behavior.

Each box represents one exchange. The SIP (CQS in this case) is the box at 6 o'clock. It shows the National Best Bid/Offer. Watch how much it changes in a fraction of a second. The shapes represent quote changes which are the result of a change to the top of the book at each exchange. The time at the bottom of the screen is Eastern Time HH:MM:SS:mmm (mmm = millisecond). We slow time down so you can see what goes on at the millisecond level. A millisecond (ms) is 1/1000th of a second.

Note how every exchange must process every quote from the others -- for proper trade through price protection. This complex web of technology must run flawlessly every millisecond of the trading day, or arbitrage (HFT profit) opportunities will appear. It is easy for HFTs to cause delays in one or more of the connections between each exchange.

Edited by weaker

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