CME Group, owner of the world’s largest futures market, was sued by three of its users who alleged the company sold access to order information to high-frequency traders ahead of other market participants.
Bloomberg reports that traders William C. Braman, Mark Mendelson and John Simms claimed the owner of the Chicago Mercantile Exchange and the Chicago Board of Trade perpetrated 'a fraud on the marketplace', according to a complaint filed April 11 in Chicago federal court.
Scrutiny of high-frequency trading and whether it gives some investors unfair advantage intensified this year amid government probes and the March 31 publication of 'Flash Boys' by Michael Lewis. While those examinations have focused mostly on U.S. equity markets, such as dark pools run by banks and exchanges owned by companies including Nasdaq OMX Group Inc., IntercontinentalExchange Group Inc. and Bats Global Markets Inc., high-frequency traders also are active in futures markets.
CME Group said in an e-mailed statement that it will fight the lawsuit and that the complaint is 'devoid of any facts supporting the allegations and, even worse, demonstrates a fundamental misunderstanding of how our markets operate'.
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