Millennium Management, one of the world’s largest hedge fund firms, was sued Friday by rival Jane Street Group, which accused it of stealing a valuable internal trading strategy after two traders defected.
Jane Street said traders Douglas Schadewald and Daniel Spottiswood had been “intimately” involved in developing the strategy before separately resigning to join Millennium in February.
The theft became evident when profits from this strategy fell by more than 50% almost immediately after Schadewald’s departure. Jane Street said it had developed a business strategy to take advantage of inefficient markets.
The lawsuit seeks compensatory and punitive damages for causing “serious and irreparable” harm through the “blatant misappropriation” of closely guarded trade secrets, which allegedly violated merchant confidentiality agreements.
Millennium manages more than $63 billion in assets and is led by Israel Englander, known as Izzy, who is worth $12.4 billion according to Forbes magazine.
The New York-based company did not immediately respond to requests for comment. Schadewald and Spottiswood are also defendants. Jane Street is based in New York.
Lawsuits over trade secret theft are common in the financial services industry, although Jane Street said Friday’s trial was the first against a former employee.
The company employs more than 2,600 people, about half that of Millennium.
Former employees included Sam Bankman-Fried, the now-convicted founder of the bankrupt cryptocurrency exchange FTX.
Englander founded Millennium in 1989 with about $35 million, Forbes said.
The case is Jane Street Group LLC v. Millennium Management LLC et al, United States District Court, Southern District of New York, No. 24-02783.
New York Post
