Jane Street Ordered To Give Ex-Traders ‘Roadmap’ Of Secrets
Douglas Schadewald and Daniel Spottiswood must have access to the disclosure, US District Judge Paul Engelmayer ruled on Wednesday.
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(Bloomberg) -- A federal judge ordered Jane Street Group to share with two former traders a detailed court filing on a secret trading strategy it claims they stole, rejecting the firm’s argument that it would give them a “roadmap for further misappropriation.”
Douglas Schadewald and Daniel Spottiswood must have access to the disclosure, US District Judge Paul Engelmayer ruled on Wednesday. He said they needed the information to properly defend themselves against the suit Jane Street filed against them and their new employer, Millennium Management, in April.
“Jane Street’s premise in bringing this case is that the individual defendants knew these trade secrets (indeed, that they developed them),” the judge wrote, adding that “it would be unreasonable” to deny them access to the information they allegedly stole.
The disclosure was ordered by Engelmayer, who previously criticized Jane Street for not adequately describing the allegedly stolen strategy in its suit and subsequent filings. Though details about it have been heavily redacted from court documents, it emerged at an April 19 hearing that it involved options trading in India.
Schadewald, Spottiswood and Millennium deny stealing any trade secrets and have countersued to get Jane Street to cover their costs. Schadewald and Spottiswood claimed credit for building the Indian options business at Jane Street but said it was based on their experience and expertise rather than any secret “algorithms or automated signals.”
In a letter to Engelmayer last month, Jane Street lawyer Deborah Brown said letting the defendants see the filing would be “devastating” as “Mr. Schadewald and Mr. Spottiswood are actively competing with Jane Street by trading in the India market right now.”
Jane Street also argued that the filing wasn’t anything that the Schadewald and Spottiswood had access to when they worked at the firm. In a June 7 letter, Brown said it was a “bespoke, made-for-litigation document that was created after they left Jane Street.”
Engelmayer previously restricted Millennium’s access to the disclosure to lawyers for Izzy Englander’s hedge fund group.
The case is Jane Street Group LLC v. Millennium Management LLC, 24-cv-02783, US District Court, Southern District of New York (Manhattan).
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