Pursuits
ECB Paper Finds Early Trading Before U.S. Economic Releases
- Study says leaks probably helped traders make $160 million
- Strict release procedures made suspicious trading less likely
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A European Central Bank-published study found suspicious trading ahead of seven regular U.S. economic releases, saying information leaks probably helped traders make more than $160 million in profits in two markets over six years.
Between January 2008 and March 2014, prices in Treasury futures and equity index markets drifted in the “correct” direction before the release time for 11 of 21 indicators, with seven showing a major move about 30 minutes ahead, according to the paper posted Monday on the ECB’s website. Three of those seven had release procedures that the researchers said were the least secure of the 21 indicators; some have since seen security beefed up to make leaks tougher.