Last month, in April 2024, Jane Street Group, a research-driven trading firm, sued Millennium Management and two ex-traders, Douglas Schadewald and Daniel Spottiswood.
The lawsuit filed in Manhattan federal court alleges the company’s former traders took a unique trading strategy with them when they left Jane Street to join Millennium Management.
The Friday hearing of the case brought an interesting development to light.
What did the court order?
US District Judge Paul Engelmayer overseeing the Jane Street Group LLC v. Millennium Management LLC case, gave Jane Street a strict deadline of May 23 to provide the court with specifics about the trade secrets it alleges were stolen.
The judge said, “You brought this trade secret case.” “Put up and identify your trade secret.” He added, “Jane Street is to meet that deadline. No excuses. No Extensions.”
Jane Street’s claims
The trading firm accuses the firm and its two former traders of stealing a “highly confidential” and “valuable trading strategy”.
The firm shares that the two traders were chiefly involved in developing the strategy they allegedly took to Millennium, violating confidentiality agreements. 
Jane Street claimed the strategy was developed over several years through extensive research and was essential to their operations. It enabled the firm to accurately and reliably predict future market activity.
It further claimed that the strategy gave significant profits, with Street Group earning more than $7 billion in net trading revenue in 2023.
However, Jane Street’s profits from the strategy declined in March 2024 owing to Millennium’s use of the same strategy.
Indian options market
The initial mention of India in the US court came in last month. In a hearing, it was revealed that the strategy involved trading in the Indian options market.
The Street Group claimed that the contested strategy was apparently making a lot of money in the Indian options market. Jane Street’s reported $1 billion profit from the strategy in 2023 underscores the market’s potential, according to a Bloomberg report. 
It should be noted that the Indian market has seen a substantial increase in average daily turnover and a notable rise in retail investor participation post-COVID.
Additionally, the remarkable success of local firms and the development of GIFT City has attracted foreign interest and international trading firms owing to the Indian market’s liquidity and growth opportunities.
Countersuit
The accused have argued that the Street Group has brought vague claims in “bad faith, and there was nothing secret at issue in the instant case. They also labelled Jane Street’s claim as “reckless speculation”.
Millennium Management, LLC
Millennium, an investment management company oversees more than $62 billion with multiple trading teams.
In its countersuit filed earlier this week stated its long-term trading in India and received regulatory approval in 2016 to hold Indian securities and other financial assets as a foreign entity. 
Additionally, the company counter-stated that it prohibits employees from bringing third-party confidential material into the company without a “thorough review and approval process.”
Jane Street initially sought an order blocking the defendants from using the strategy, but the request was denied.
Schadewald and Spottiswood
They also countersued earlier this week, in which they stated that they were disappointed in their 2023 pay packages and left Jane Street.
They called Jane Street’s description of the alleged secret strategy “vague and ambiguous”. They said it “could apply to almost any trading in options on exchanges in India.”
On intimate involvement in building the options trading business at Jane Street, they said reliance was on their own expertise and experience, not any “algorithms or automated signals.”
