Jane Street Ordered To Detail Secret India Trading Strategy

Jane Street Group was ordered to detail the secret Indian options strategy it alleges two former traders took to their new jobs at Millennium Management to the Manhattan federal judge overseeing the case.

Buildings stand on Wall Street near the New York Stock Exchange in New York. Photographer: John Taggart/Bloomberg

Jane Street Group was ordered to detail the secret Indian options strategy it alleges two former traders took to their new jobs at Millennium Management to the Manhattan federal judge overseeing the case.

At a Thursday conference, US District Judge Paul Engelmayer gave Jane Street a hard May 23 deadline to provide him with specifics about the trade secrets it alleges were stolen. Millennium and the two ex-traders, Douglas Schadewald and Daniel Spottiswood, have argued that there was nothing secret at issue in the case and accused Jane Street of bringing vague claims in “bad faith.” 

Engelmayer clearly indicated he didn’t think Jane Street had identified an actionable trade secret.

“You brought this trade secret case,” the judge said. “Put up and identify your trade secret.” He added that “Jane Street is to meet that deadline. No excuses. No Extensions.”

Jane Street sued the two men and Izzy Englander’s hedge fund group last month, saying they stole an “immensely profitable” proprietary strategy. It was later revealed in a court hearing that the strategy related to options trading in India. Jane Street initially sought an order blocking the defendants from using the strategy, but Engelmayer denied that request. It’s now seeking damages.

Millennium said in a countersuit filed earlier this week that it has been trading in India for years, noting that it received regulatory approval in 2016 to hold Indian securities and other financial assets as a foreign entity. According to its filing, Millennium prohibits employees from bringing third-party confidential material into the company without a “thorough review and approval process.”

Schadewald and Spottiswood also countersued earlier this week, saying they left because they were disappointed in their 2023 pay packages. Schadewald and Spottiswood called Jane Street’s description of the alleged secret strategy “vague and ambiguous” and said it “could apply to almost any trading in options on exchanges in India.”

In their countersuit, the two men claimed they were chiefly responsible for building the options trading business at Jane Street. But they said they relied on their own expertise and experience, not any “algorithms or automated signals.”

Filings by both parties have been heavily redacted, though Jane Street has continued to express concern about further details of its strategy becoming public. The judge told the parties to come up with a proposed order protecting any confidential information they don’t want to reveal publicly.

Engelmayer also set a schedule for the rest of the case, giving the parties until the end of September to complete fact discovery and the end of November to finish expert discovery. He scheduled another conference for Dec. 13.

The case is Jane Street Group LLC v. Millennium Management LLC, 24-cv-02783, US District Court, Southern District of New York (Manhattan).

(Updates with additional detail from the conference.)

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