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Tuesday, May 21, 2024 | Back issues
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Fired Worker Says He Blew Whistle on Reuters

MANHATTAN (CN) - Thomson Reuters gives selected subscribers a 2-second edge on "potentially market-moving information" and fired a worker who told the FBI about it, the man claims in court.

Mark Rosenblum sued Thomson Reuters (Markets) LLC in Federal Court. (Parentheses in title in complaint.)

Rosenblum says he worked as a "redistribution specialist" for Thomson Reuters from 2008 to 2012. (Thomson bought Reuters and created Thomson Reuters in April 2008.)

Rosenblum says his job entailed selling millions of dollars in financial data to customers, to use in making investments. He was paid $101,500 a year, but with bonuses he made more than $200,000 Rosenblum claims.

His main product, Rosenblum says, was the Thomson Reuters/University of Michigan Surveys of Consumers, which gauged consumers' beliefs and expectations about the U.S. economy.

He claims the product is so respected that it "Index of Consumer Expectations" is a component of the U.S. Index of Leading Economic Indicators. The information in the product is compiled by the university and released by Thomson Reuters in three tiers.

"The tiered release provides a bimonthly release of information to 'ultra low-latency' subscribers at 2 seconds before 9:55 a.m., followed by 'desktop' subscribers at 9:55 a.m., followed by release to the public at 10:00 a.m.," Rosenblum says in the complaint.

The complaint does not explain what an ultra low-latency subscriber is.

"On or about May 10, 2012, Richard Turner, a Thomson employee, e-mailed Thomson employees, stating that the Product provided 'potentially market-moving information' to the 'ultra low-latency' subscribers who received the Product at two seconds before 9:55 a.m.," the complaint states.

"By releasing the Product to ultra low-latency subscribers two seconds early, those subscribers have a two second head start to make transactions based upon that information.

"At or about this time, Rosenblum formed the reasonable belief that the Product's tiered distribution violated securities laws barring insider trading.

"On June 29, 2012, Rosenblum disclosed to an FBI agent that Thomson's tiered release involving the Product, on the basis of his reasonable belief that the tiered release violated federal securities laws (the 'Report').

Also on June 29, 2012, Rosenblum notified his managing director, the president, general counsel and the Thomson employee Ethics Hotline that he had contacted federal investigators regarding the Product's tiered release.

"Upon information and belief this early release violates the Regulation NMS which regulates how companies, such as Thomson, share information with the public and is meant to ensure equal access to that information. The early release of this number provided an advantage to those companies which could result in inequity in the market place in violation of Regulation NMS.

"Upon further information and belief this early release violates Section 10(b) of Rule 10b-5 which makes it unlawful to mislead investors or omit facts which could mislead investors."

Rosenblum claims that his report to the FBI is protected under the Dodd-Frank Act.

However, "On or about August 3, 2012, mere weeks after the report, Rosenblum's employment with Thomson was terminated with no severance and without compensating plaintiff for any of his accrued vacation days," he says.

He seeks punitive damages for lost wages and benefits, Dodd-Frank violations, pain and suffering, humiliation, embarrassment, stress, anxiety, lost sleep, loss of enjoyment of life, and migraine headaches.

He is represented by Jesse Rose with of Phillips & Associates in Manhattan.

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