Proprietary trading firms obsess over and are accustomed to an extraordinary level of secrecy — something that doesn't hold up well in open cou

Details about Jane Street's top secret, $1 billion trade revealed in court

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2024-04-20 04:30:03

Proprietary trading firms obsess over and are accustomed to an extraordinary level of secrecy — something that doesn't hold up well in open court.

Jane Street learned that the hard way at a federal court hearing on Friday over a temporary restraining order it requested against hedge fund Millennium Management. The restraining order, which Manhattan federal Judge Paul Engelmayer denied, was aimed at stopping Millennium from using a top-secret trading strategy Jane Street says two ex-employees pilfered to make money for Millennium.

It was the first hearing over a lawsuit representing a clash of two of Wall Street's most formidable and lucrative trading firms. In a heavily redacted complaint filed April 12, Jane Street accused former senior index options trader Doug Schadewald and his direct report Daniel Spottiswood of taking highly valuable trading IP with them when they left to join Millennium in February. Most details about the trade were redacted. Even the country the strategy focused on is highly confidential, according to Jane Street.

At Friday's hearing, Jane Street attorney Deborah Brown, a partner at Quinn Emanuel, argued that revealing the country would enable competitors to start digging into the signals and hedging strategies and figure out the trade.