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Business News/ Market / Stock-market-news/  Thomson Reuters to suspend early data release amid probe
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Thomson Reuters to suspend early data release amid probe

NY authorities probing if early release of Thomson Reuters’ consumer sentiment index is a violation of state securities laws

When the lawsuit was filed, Thomson Reuters said the accusations were unsubstantiated and without merit. Photo: AFP (AFP)Premium
When the lawsuit was filed, Thomson Reuters said the accusations were unsubstantiated and without merit. Photo: AFP
(AFP)

New York:Thomson Reuters Corp. will suspend the early release of a consumer survey to select traders as part of an agreement with the New York attorney general’s office, which is probing the matter, according to a person familiar with the investigation.

New York attorney general Eric Schneiderman is investigating whether release of the Thomson Reuters/University of Michigan index of consumer sentiment to some customers is a violation of state securities laws, said the person, who wasn’t authorized to speak publicly about the investigation and asked not to be named.

The Thomson Reuters/University of Michigan survey measures consumer attitudes and expectations about the US economy and is a closely watched gauge in financial markets. Some Thomson Reuters subscribers receive the data two seconds early, giving them a jump on other market traders, while other customers see it five minutes ahead of the public release, according to a former employee’s lawsuit in federal court in Manhattan.

While the state’s investigation is pending, Thomson Reuters will suspend the release at 9:54:58am. under an agreement with Schneiderman’s office, the person said. The next report on the consumer sentiment index is scheduled for 12 July.

Bloomberg Lp, the parent company of Bloomberg News, competes with New York-based Thomson Reuters in providing financial news and information. Bloomberg publishes a Consumer Comfort Index.

Three tiers

The University of Michigan data is released bimonthly in three tiers, according the former Thomson Reuters worker’s lawsuit. The first release to some subscribers occurs at 9:54:58am, followed by a release at 9.55am to what the company calls desktop subscribers and then the release to the public at 10.00am, according to the complaint.

“The first release gives those subscribers a head start to trade on the information," according to the former employee, Mark Rosenblum. Rosenblum said in the complaint that he believed the tiered distribution violated insider-trading laws, and in June 2012, he contacted the Federal Bureau of Investigation and Thomson Reuters executives. He said in his complaint that he was fired in August that year.

When the lawsuit was filed, Thomson Reuters said the accusations were unsubstantiated and without merit.

A Thomson Reuters spokesman didn’t respond immediately yesterday to an e-mail seeking comment about the investigation.

The inquiry by Schneiderman’s office is focused on the early releases at 9:54:58am and at 9.55am, according to the person. The state is investigating whether market participants get an improper advantage by being able to trade on the information early and whether securities markets are distorted as a result.

The Rosenblum case is Rosenblum v. Thomson Reuters (Markets) Llc, 13-cv-02219, US District Court, Southern District of New York (Manhattan). BLOOMBERG

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Published: 08 Jul 2013, 08:55 AM IST
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