Jane Street’s derivative trading strategy lawsuit with Millenium involves Indian markets: Reports

US Hedge Fund Jane Street’s lawsuit against rival Millenium Management regarding a secret trading strategy involves trading in the Indian derivatives market, according to FT and Bloomberg.

Jane Street had sued Millenium Management and two former employees, Douglas Schadewald and Daniel Spottiswood earlier in April, for allegedly stealing a “highly valuable, unique, and proprietary” trading strategy, FT reported.

Lawyers of Millenium and the two traders told the US District Court in Manhattan that the strategy was deployed in Indian markets. Bloomberg reported that lawyers for the defendants said derivatives trading in India is lucrative, citing media reports. “Millennium lawyer Andrew Levander likewise said the Indian government has promoted opportunities for traders there.”, Bloomberg reported.

Also read: Desperate retail investors drive India’s options craze

In the hearing, Jane Street claimed that the strategy earned around $1 billion in the previous year and profits from the strategy fell 50 percent in March 2024 attributing it to its competitors using the same strategy.
The traders moved to Millenium Management from Jane Street earlier this year.

Millennium in its lawsuit said the traders misappropriated trade secrets. The company’s lawyer said the firm spent “tens of millions of dollars” to develop the trading scheme.

Also read: Retail traders are losing billions in India’s booming options market 

US District Judge Paul Engelmayer denied Jane Street’s request to prevent Millenium and the traders from using the strategy and put the case on an expedited schedule and put a trial date in July.

Millenium was among the highest-growing hedge funds in 2023. According to FT, Millennium gained 10 percent, being only behind Citadel which gained 15.3 percent in its Wellington Fund in 2023.