Three futures traders have filed a lawsuit against CME Group
Inc. alleging the exchange operator sold data to high-frequency
traders ahead of other participants that also paid to see the data
first.
The lawsuit, filed Friday in an Illinois District Court, is
seeking class-action status on behalf of users that have traded
futures contracts on the Chicago Board of Trade and the Chicago
Mercantile Exchange from 2007 until April of this year.
The plaintiffs allege CME charged exchange and data fees for
real-time price data, and purported that the data was sold to the
users in real time. The suit further states that CME allegedly also
charged high-frequency traders for the ability to see the data
before others, including people who paid and continue to pay CME
for seeing the same data first.
CME said the lawsuit was "devoid of any facts supporting the
allegations and, even worse, demonstrates a fundamental
misunderstanding of how our markets operate."
"The case is without merit, and we intend to defend ourselves
vigorously, " CME said.
High-frequency traders have been in the spotlight in recent
weeks after the release of Michael Lewis's "Flash Boys," a book
that focuses on traders that use dedicated data cables and
specialized algorithms to trade milliseconds ahead of the rest of
the market.
Write to John Kell at john.kell@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires