An edge for traders that’s only fair

L. Gordon Crovitz
The Wall Street Journal

A “level playing field” isn’t always a fair one, said L. Gordon Crovitz. We saw that last week, when New York Attorney General Eric Schneiderman pressured news agency Thomson Reuters to stop giving select customers a two-second advance feed when it releases the monthly University of Michigan Consumer Sentiment Index. Schneiderman claims those extra two seconds let high-frequency traders take “unfair advantage” of the data. But in his pursuit of fair play, Schneiderman has “struck a blow against research and information.” After all, Thomson Reuters helps fund the university’s index; shouldn’t it be allowed to profit from it? And isn’t it blindingly obvious that “requiring information to be available free to everyone at the same time would mean that less information would be produced”? Schneiderman’s legal theory would have “banned Paul Julius Reuter from using carrier pigeons in the 1850s to get news to his subscribers in Europe faster than anyone else.” Today it will put “tens of thousands of business publications, trade associations, and private research firms that charge for content” out of business. This bizarre approach only hurts New York by “giving other financial capitals like London and Hong Kong a further advantage.”