Whistleblower Alleges Early Release of Embargoed Data


A former  employee accused Thomson Reuters of firing him for telling the Federal Bureau of Investigation that the company’s release of consumer sentiment data violated insider-trading laws according to a Bloomberg article.

Mark Rosenblum filed suit under whistleblower laws for being dismissed in August, shortly after making the complaint that the company gave some customers an advantage by releasing the Thomson Reuters/University of Michigan Surveys of Consumers to them first.  A Thomson Reuters spokesman was quoted as saying the accusations are without merit.

According to Rosenblum, Thomson Reuters releases the consumer sentiment survey in three tiers.  At two seconds before 9:55 a.m., it goes to “ultra low- latency subscribers”; “desktop” subscribers get it at 9:55 a.m.; and at 10 a.m. it goes out to the general public, he said.


Wall Street Journal reported in January that law-enforcement authorities had conducted an investigation into whether media companies facilitated insider trading by prematurely releasing embargoed government data.  According to the article, the investigation was dropped after investigators were unable to prove a connection between early release of data and trading benefiting from the release.

In a separate incident, Bloomberg tested the Commerce Department’s embargo procedure known as a “lockup” and found a flaw that could allow reporters to deliver data before the end of the embargo period, and reported the flaw to the Commerce Department.

The Journal article said that SEC and FBI investigators had harbored suspicions since 2007 that some traders may have gained access to information slightly before it was public, but were unable to substantiate how it happened.

Although the SEC has been investing in improved systems over the last few years, we doubt that regulators are well equipped to identify and prosecute automated trading that benefits from opportunities that are measured in nanoseconds.




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