Will The New York Attorney General Shut Down Seeking Alpha Pro?

I mean, I’m just asking that question in the post title, in the wake of the total non-story that is the Reuters distribution of the University of Michigan Consumer Confidence Data.  After all, Seeking Alpha Pro’s stated mission is to give subscribers early access to market moving information…


Rather than belabor the point, I’d suggest you read Matt Levine’s quality-as-usual proof-by-satirical-sarcastic-example which illustrates the silliness of this Reuters story.  We need to be crystal clear about a main point here:  the information in question is positively NOT inside information – it’s proprietary research*.   The owners of this research have the rights to distribute it however they please.   In this case, Reuters pays the owners of the research for the distribution rights.  Seeking Alpha Pro does something similar, giving an “early look“, “exclusive early access“,  “an edge” and “an information advantage” regarding articles which “frequently move stocks.

Ironically, none of the people writing about this Reuters “story” are asking the questions that any trader would ask.   In essence, there’s a reason stories like this don’t bother traders, and it’s because we understand “how trading works.”  It doesn’t matter to me that someone else is getting the data 2 seconds before me, because I already  know that I can’t react as quickly as they can react.   But more importantly, I don’t leave bids and offers sitting around at 9:54:58 on the day of the consumer confidence numbers because I know that there will be other people reacting to the data quicker than I can – and seeing it before I even see it!

Did you catch that important point?   The question we should be asking is *who* is the counterparty to these obviously-evil-HFT-Algobots (sarcasm) who are paying to access and process the data before I get it?   See, you can’t just take the data, see it, and “trade” on it – you need someone to *trade* with – you need a counterparty to your trade: someone on the other side.    My guess is that not every obviously-evil-HFT-Algobot processes the data in the same way, and they are largely trading with each other in those milliseconds after the release in which I can’t even react.   Who cares?  If they’re not trading with each other, who are these idiots who are leaving blind bids and offers out there during *scheduled* news release periods?   And again, who cares?   Don’t leave bids and offers hanging in the market when you’re flying blind on a data release that other people have access to.

Do I think the NY AG should shut down Seeking Alpha Pro?  Of course not.  And he should stop his populist political grandstanding and get off his soapbox about the “who and the when” of how Reuters sells their data**.


CNBC: Thomso Reuters Gives Elite Traders Early Advantage

Dealbreaker: NY AG Will Supervise When and How News Organizations Can Report News

Felix Salmon:  The Optics of Selling Financial Information


disclosure: I do not work for Reuters.   I did not attend the University of Michigan.

* I know what you’re gonna say – something about public funding for the University of Michigan, right?  Try again:

“Asked why a taxpayer-financed university should sell data to Wall Street before it releases it to the taxpayers, Fitzgerald said: “Most of our research funding comes from private sources.””

** with one exception:  there should be disclosure of the tiered distribution of the data, and Reuters says that there is and was.

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