Marketwired Discontinues Selling To HFT

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Nearly one month after Warren Buffett’s Business Wire discontinued the practice of providing high frequency trading firms access to information, Marketwired, a firm that distributes corporate earnings and other potentially market moving news, has stopped selling to HFT firms.

Marketwired had conversations with NY Attorney General Eric Schneiderman

The move comes after Marketwired had conversations with New York Attorney General Eric Schneiderman, according to a Reuters news report. The firm discontinued the service so as to “eliminate any perceived advantages gained through technology by certain customers,” according to a statement obtained by Reuters.  Last year, Thomson Reuters Corp agreed to stop its early release of the Thomson Reuters/University of Michigan consumer sentiment data to a small group of trading clients.  BlackRock Inc, the world’s largest asset manager, agreed to end its analyst survey program worldwide as part of an agreement with the Attorney General’s office, the report also noted.

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Damage to firm reputation

Damage to a firm’s reputation was cited by both Marketwired and Business Wire as reasons for discontinuing offering the service.  Marketwired is majority-owned by Omers, a Toronto, Canada-based private equity firm. At the time they discontinued offering the service, Business Wire Chief Cathy Baron Tamraz said the company had done “nothing wrong” stating that a news article “may have caused some misperceptions, and that was of deep concern to us.”

As noted in ValueWalk, the issue started with a February 6 Wall Street Journal article Scott Patterson, author of the algorithmic trading book The Quants, wrote, which said that “High-frequency traders have been paying to get direct access to market-moving news releases, a practice that can give firms the ability to trade fractions of a second ahead of less fleet-footed investors. The traders are getting news releases from Business Wire, which distributes corporate-earnings releases and economic reports such as the Philadelphia Federal Reserve’s monthly manufacturing survey…”

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com