According to the Huffington Post’s Eleazar David Melendez, The dismissal of an investigation into major media companies suspected of giving clients a sneak peek at crucial data drew great surprise on Wall Street, where traders make their living profiting from blips of information moving at the speed of light.
Federal authorities had been pursuing allegations that various media companies — including Bloomberg LP, Thomson Reuters and Dow Jones and Co. — leaked key economic data to select investors, the Wall Street Journal reported Monday. But the investigators dropped the probe, according to the paper, in part because they could not conclusively determine that investors were able to use the advance look at the numbers to extract profits.
Wall Street analysts pronounced that explanation baffling, noting that in modern markets — fueled by high-frequency trading and robotic transactions — a mere fraction of a second can be enough to execute trades worth billions of dollars.
“We have certainly reached a point where information advantage in millisseconds, possibly microseconds, definitely means a difference,” said Zach Ziliak, an attorney at law firm Mayer Brown in Chicago, which advises clients on issues surrounding high-frequency trading. “The millions that have been invested in microwave communication between New York and Chicago is a testament to the fact that firms expect to make a profit on informational advantages measured in milliseconds.”