By MARCY GORDONAP Business Writer
WASHINGTON (AP) - The Conference Board will no longer provide its economic reports in advance to news organizations because it suspects the data is being diverted early to computer-driven trading systems, which can unfairly profit from it.
The private research group has long provided its monthly data to reporters 30 minutes before the information is publicly released. The early access has allowed journalists to prepare news reports ahead of the information's public release at 10 a.m. Eastern time.
Starting Tuesday, the Conference Board's data will be released to everyone simultaneously. The board announced the change Thursday.
"We are taking this action because of indications that our embargoed data is being diverted, intentionally or otherwise, to computer systems that create an unlevel playing field for market participants," the Conference Board said in a letter to the news organizations.
The New York-based organization issues reports on consumer confidence and other economic indicators that can affect financial markets.
Its move follows reports that another organization, Thomson Reuters/University of Michigan, provides its monthly report on consumer sentiment early to some paying clients.
The Conference Board said one news organization approached it and said it had inadvertently breached the embargo by fractions of a second by channeling the data to a trading system's computer prematurely. The breach resulted from a mistiming of the computer's clock, board officials said.
The board didn't name the news organization.
The Conference Board decided about three weeks ago to halt the embargo system, Jon Spector, its president and CEO, said in an interview. The decision resulted from a review of its data releases, he said.
There was no evidence of improper trading on the board's data ahead of its public release, Spector said. But the board wanted to erase any public doubts.
"We didn't want to do anything to contribute to the feeling that the game is rigged," he said.
Modern stock trading is dominated by automated computer systems that make trades in tiny fractions of a second. High-speed traders can profit from receiving data even milliseconds before its public release.
The Labor Department last year revoked early access to its employment data for several companies that deliver data to high-speed traders but produce little or no original news content.
That decision followed a department review of its security policies. It looked into which news organizations should or shouldn't be allowed to receive early access to its economic data.
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