(Bloomberg) – A former trader who claims Jane Street Group secretly stole a multibillion-dollar Indian options strategy for Millennium Management previously called his new employer’s own strategy “stupid.” He announced that he was mocking him.
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Jane Street said in a court filing last week that Doug Schadewald's comments were based on well-known “textbook” trading principles and should be considered trade secrets. He said that this weakened the defense's argument that it was not the case. Jane Street claims that if the strategy were well known, other millennium traders would have used it, but that was not the case.
“Indeed, before joining Millennium, Mr. Schadewald mocked Millennium's volatility traders, saying that “nobody makes money'' because “they all use the same stupid strategies.'''' Jane – Street's attorney Deborah Brown wrote in a letter to a federal district judge Wednesday. Paul Engelmayer of Manhattan;
The uniqueness of Jane Street's strategy lies in the fact that in April, a few weeks after Jane Street joined Izzy Englander's hedge fund group, Jane Street worked with Schadewald and fellow trader Daniel.・This is the core of the lawsuit brought against Mr. Spottiswood and Mr. Millennium.
The case is currently in the discovery phase, where the parties are exchanging evidence. Mr Schadewald and Mr Spottiswood claim credit for establishing Jane Street's India Options Desk, but say their trading is based on experience and expertise rather than secrets. states. Millennium similarly claims to have been active in the Indian market for many years.
Vapor deposition demand
Jane Street said discoveries so far indicate that the allegedly stolen strategy was not widely used in Millennium outside of Schadewald's group. Jane Street said Millennium had refused to produce deposition witnesses to testify about Schadewald's knowledge and use of the strategy prior to his employment and should be ordered to do so.
“Millennium admits that it had been doing business in India for 'a number of years' before hiring Schadewald, so Jane Street has no doubt that Millennium had been doing business in India for 'a number of years' before hiring Schadewald. “He has the right to testify as to whether he employed the alleged strategy and, if so, for how long,'' Brown wrote.
Jane Street and Millennium declined to comment Monday. Schadewald's attorney did not respond to a request for comment.
Much of the allegedly stolen strategy and case evidence was heavily redacted in court filings. A court hearing in April revealed that they were involved in Indian options trading that netted Jane Street $1 billion in profits last year.
