A.G. Schneiderman Secures Agreement By Thomson Reuters To Stop Offering Early Access To Market-Moving Information

NEW YORK - Attorney General Eric T. Schneiderman announced today that financial information giant Thomson Reuters has agreed to immediately discontinue the practice of providing high-frequency traders with certain market-moving consumer survey results prior to the release of that information to its other subscribers, a move prompted by a current investigation by the Attorney General's office into this matter.

Prior to this agreement with Attorney General Schneiderman, Thomson Reuters was selling early access to the University of Michigan consumer survey results to high-frequency traders. The survey results are distributed exclusively by Thomson Reuters every other Friday. The University of Michigan’s consumer survey results are among the most closely watched indicators of consumer sentiment in the United States. High-frequency traders were able to access and act on this information two seconds earlier than other Thomson Reuters subscribers. That two second advantage is more than enough time for these traders to take unfair advantage of their early access to this information as they execute enormous volumes of trades in the blink of an eye.  The Attorney General’s investigation into the scope and impact of this practice is ongoing.

“Promoting fairness and avoiding distortions in the securities markets is an important focus of this office” said Attorney General Schneiderman. “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.”

The change of Thomson Reuters’ practice immediately removes this unfair advantage for high-frequency traders and only allows them access to this market-moving information at the same time that it is made available to other Thomson Reuters subscribers.  This change immediately removes a prior distortion in the markets and it sends a message that unfair timing advantages for high-frequency traders and others will not be tolerated by the Attorney General.

The Office’s investigation into this matter is ongoing and is being led by Chad Johnson, Senior Counsel in the Executive Division, Marc Minor, Investor Protection Bureau Chief, and Assistant Attorneys General Kenneth Haim and Shmuel Kadosh.