A story recently published in the Wall Street Journal mentioned that Berkshire Hathaway’s Business Wire division is one of the main sources of licensed direct business news feeds to heavy stock market traders.
This article was enough to put it into those licensing agreements.
Cathy Baron Tamraz, CEO of Business Wire, made a statement saying that this move was made “in consultation with” Warren Buffett and after discussing the issue with clients, because the Journal article “may have caused some misperceptions, and that was of deep concern to us.”
The article basically says that certain traders have access to technology that provides an advantage allowing them to act quicker even if the news arrives at the same time. In effect, they gain a valuable edge in the markets.
Tamraz also mentioned that these licenses provide traders “absolutely no time advantage” and that the delivery network from Business Wire follows the market’s fair disclosure regulation and “disseminates news simultaneously and in real time to all market participants.”
But concerns brought up within the article led to putting an end to the “handful” of these licenses, she tells us. “Our most important assets are our reputation and the trust we have earned from our clients and other market participants for more than a half century.”
A conservative blog called Investor Discussion Board also reported that Business Wire met with and discussed the situation with New York Atty. Gen. Eric Schneiderman’s office, which “pushed” the service provider to stop the licensing.
“Business Wire’s decision to voluntarily step forward and stop selling its clients’ information directly to high-speed traders is a tremendous victory for our effort to eliminate advanced trading on market moving information,” said Schneiderman.