Former Jane Street Trader Denies Using Firm's Secret Strategy at Millennium Management

Douglas Schadewald, a former trader at Jane Street Group who now works at Millennium Management, has dismissed claims made by his former employer in a lawsuit that he and another ex-employee, Daniel Spottiswood, used Jane Street's proprietary trading strategy to generate substantial profits in India's options market.

Jane Street's lawsuit contends that Schadewald and Spottiswood utilized the company's confidential trading approach to make over $150 million in profits after joining Millennium. However, Schadewald has rejected these allegations as "reckless speculation," stating that it is "not only wrong, but impossible" for them to have achieved such high returns using Jane Street's strategy ("Former Jane Street Group trader, Douglas Schadewald, who now works at Millennium Management, has denied the claims made by his former employer in a lawsuit. Jane Street alleges that Schadewald and another former employee, Daniel Spottiswood, used the company's secret trading strategy to make over $150 million in profits in India's options market after joining Millennium.").

While not disclosing the actual profits earned at Millennium, Schadewald has refuted the $150 million figure cited by Jane Street in the legal action. Spottiswood has also denied the accusations, asserting that their success at Millennium was achieved without relying on Jane Street's proprietary strategies ("A lawsuit has emerged involving Jane Street Group, a former trader Douglas Schadewald, and his colleague Daniel Spottiswood, now at Millennium Management. Jane Street alleges that Schadewald and Spottiswood utilized a proprietary trading strategy in India's options market, leading to significant profit losses for Jane Street. However, both Schadewald and Spottiswood have refuted the accusations, asserting that their success at Millennium was achieved without resorting to Jane Street's confidential strategies.").

The legal dispute has brought attention to the competitive and secretive nature of high-speed trading in India's growing options market. U.S. District Judge Paul Engelmayer denied Jane Street's request for a preliminary injunction and instead scheduled an expedited trial for July ("The legal proceedings have drawn attention to the competitive and secretive nature of high-speed trading in India's burgeoning options market. U.S. District Judge Paul Engelmayer denied Jane Street's request for a preliminary injunction, opting instead for an expedited trial set for July.").

Why this matters: The lawsuit highlights the intense competition and the high stakes involved in the world of high-frequency trading, particularly in emerging markets like India. The outcome of this case could have significant implications for the protection of proprietary trading strategies and the movement of talent between rival firms.

As the legal battle unfolds, the court will need to determine whether Schadewald and Spottiswood indeed used Jane Street's confidential trading strategy at Millennium Management or if their success was the result of their own expertise and methods. The expedited trial scheduled for July is expected to shed more light on the matter and potentially set a precedent for similar cases in the future.

Key Takeaways

• Jane Street sued ex-traders Schadewald and Spottiswood for using its trading strategy
• Schadewald and Spottiswood deny using Jane Street's strategy, claim own expertise
• Judge denied Jane Street's request for injunction, scheduled expedited trial for July
• Case highlights intense competition and high stakes in India's options trading market
• Outcome could set precedent for protecting proprietary trading strategies