Brody Mullins and Scott Patterson report for The Wall Street Journal that several times a month, the Labor Department invites news reporters to a sealed room for an early look at soon-to-be-released reports such as the unemployment rate. One organization attending in recent years stands out from the rest.
Founded by an investment firm and now owned by the Deutsche Börse stock exchange, Need To Know News has operated with an overriding mission: sending data directly from the government through high-speed lines to financial firms that are able to trade on it instantly. Some have paid $375,000 a year for the service.
“Instances of press lockups being manipulated for the benefit of high-frequency traders should be investigated. Machine-readable data transmission plays an important role in the markets that should be preserved,” said Edgar Perez, author of Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets.