Futures Traders Sue CME Over Real-Time Data

Three futures traders have filed a lawsuit against CME Group Inc. alleging the exchange operator sold data to high-frequency traders ahead of other participants that also paid to see the data first.

The lawsuit, filed Friday in an Illinois District Court, is seeking class-action status on behalf of users that have traded futures contracts on the Chicago Board of Trade and the Chicago Mercantile Exchange from 2007 until April of this year.

The plaintiffs allege CME charged exchange and data fees for real-time price data, and purported that the data was sold to the users in real time. The suit further states that CME allegedly also charged high-frequency traders for the ability to see the data before others, including people who paid and continue to pay CME for seeing the same data first.

CME said the lawsuit was "devoid of any facts supporting the allegations and, even worse, demonstrates a fundamental misunderstanding of how our markets operate."

"The case is without merit, and we intend to defend ourselves vigorously, " CME said.

High-frequency traders have been in the spotlight in recent weeks after the release of Michael Lewis's "Flash Boys," a book that focuses on traders that use dedicated data cables and specialized algorithms to trade milliseconds ahead of the rest of the market.

Write to John Kell at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires