Thomson Reuters Corporation (NYSE:TRI) (TSE:TRI) will suspend the early release of the University of Michigan consumer data to select traders, as part of an agreement with New York Attorney General’s office.
The news and information company has an arrangement with the University of Michigan to allow some of its clients paying extra to receive the data two seconds before others.
New York Attorney General Eric Schneiderman is investigating whether release of Thomson Reuters / University of Michigan index of consumer sentiment to select few ahead of others violates any state securities laws.
The bimonthly data is distinct from the consumer confidence index produced by the private research group the Conference Board.
Thomson Reuters Under SEC Probe for Manufacturing Data
Earlier, it was reported the Securities and Exchange Commission is investigating the relationship between Thomson Reuters and the Institute for Supply Management, following a report of a data leak.
The S.E.C. is investigating why certain clients of Thomson Reuters Corporation (NYSE:TRI) (TSE:TRI) received and traded on the ISM’s market-moving manufacturing data ahead of its official release.
Preferential dissemination of data through high-speed computers would facilitate paid customers to act on the data milliseconds ahead of others. U.S. consumer spending is watched closely as it accounts for nearly 70 percent of U.S. economic activity.
The tiered distribution of University of Michigan consumer data happens in three phases. According to a complaint by a former Thomson Reuters employee, the first release is made at 9:54:58 a.m. to select subscribers, while the second distribution occurs at 9:55 a.m. to desktop subscribers. The data is released to the public at 10 a.m.
The former employee, Mark Rosenblum, believes the tiered distribution violated insider-trading laws.
According to a report from The New York Times, some clients paid $6,000 a month for the 2-second head-start to trade on the information.
Last month, the Conference Board indicated that it will stop providing its economic reports in advance to news organizations as it suspects some sections derive unfair profit from the early release of report.
According to a statement from Thomson Reuters Corporation (NYSE:TRI) (TSE:TRI), effective July 12, the news and information company will simultaneously distribute the University of Michigan consumer data to clients at 9:55 a.m.
