On October 7, New York Attorney General, Eric Schneiderman issued a press release applauding the decision by the University of Michigan to distribute its market-moving consumer sentiment survey through Bloomberg LP’s news service so that it will be available to investors without charge. This discontinues the former practice of distributing the survey through another information vendor which charged a fee to subscribers. In July, the Attorney General had obtained the agreement of the former information vendor to discontinue the practice of providing the survey for a fee to high frequency traders two seconds in advance of other subscribers.
This initiative by the Attorney General is part of a broader effort he has referred to as “Insider Trading 2.0”, intended to combat practices that result in perceived unfair informational advantages to select market participants. The term Insider Trading 2.0 is used to distinguish these timing advantages from traditional forms of insider trading in which a person uses or transmits information that they have received by virtue of a relationship of trust and confidence with another person for personal gain. Insider Trading 2.0 attacks practices in which the business model is to contractually afford a timing advantage to select market participants.