Millennium Management, one of the world’s largest hedge fund firms, was sued Friday by rival Jane Street Group for stealing valuable internal trading strategies after two traders defected. .
Jane Street said traders Douglas Schadewald and Daniel Spottiswoode were “intimately” involved in developing the strategy until they left separately to join Millennium in February.
The company said the theft became apparent when profits from the strategy plummeted by more than 50% shortly after Mr. Schadewald left. Jane Street said it built its trading strategy to take advantage of market inefficiencies.
The lawsuit alleges compensatory and punitive damages for breaching non-disclosure agreements between traders and causing “material and irreparable” harm through “material misappropriation” of closely guarded trade secrets. They are seeking compensation.
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.
The New York-based company did not immediately respond to a request for comment. Schadewald and Spottiswood are also defendants. Jane Street is based in New York.
Although lawsuits alleging trade secret theft are common in the financial services industry, Jane Street said Friday’s suit is the first against a former employee.
The company has more than 2,600 employees, about half of Millennium’s employees.
Former employees include Sam Bankman Fried, the now-convicted founder of bankrupt cryptocurrency exchange FTX.
Mr. Englander founded Millennium in 1989 with about $35 million, according to Forbes.
The case is Jane Street Group LLC v. Millennium Management LLC et al., U.S. District Court, Southern District of New York, No. 24-02783.
