New York probes special deals for high-speed traders

New York's top prosecutor Tuesday vowed to end special concessions that exchanges provide to high-speed securities traders, giving them an unfair advantage over retail investors, AFP reports.New York Attorney General Eric Schneiderman said the "special services" include providing high-speed traders with extra network bandwidth, or permitting them to locate computer servers at the exchanges themselves.These services can result in a timing advantage, often in milliseconds, that ensures high-speed traders "risk-free" transactions, Schneiderman said in a statement."Rather than curbing the worst threats posed by high-frequency traders, our markets are becoming too focused on catering to them," he said."I am committed to cracking down on fundamentally unfair -- and potentially illegal -- arrangements that give elite groups of traders early access to market-moving information at the expense of the rest of the market."Schneiderman's office recently launched an inquiry into services provided especially to high-speed traders by the New York Stock Exchange, Nasdaq and other exchanges, according to a person familiar with the matter.Both the NYSE and Nasdaq declined comment.The probe is Schneiderman's latest effort to reign in high-speed traders.Last fall, he pressured financial information provider Thomson Reuters to stop supplying market-moving data two seconds early to subscribers -- mainly high-speed traders -- which paid extra for the advantage.Schneiderman also worked to persuade Business Wire, a unit of Berkshire Hathaway that distributes corporate releases, to stop providing documents via direct links to high-speed traders who paid for the more-speedy access to news.