Fast traders are getting data from SEC seconds early

Two separate groups of academic researchers have documented a lag time between the moment paying subscribers, including trading firms, newswires and others, receive the filings via a direct feed from an SEC contractor and when the documents are publicly available on the agency’s website. The ability to get the information before it is on the SEC site can give traders precious seconds to act on the news. When documents carrying good or bad news reach the subscribers early, trading volume often surges in the relevant stocks and prices move, the researchers found. “These results raise questions about whether the SEC dissemination process is really a level playing field for all investors,” wrote Jonathan Rogers of the University of Colorado, who co-authored an Oct. 22 study that analyzed the SEC’s distribution system.

via Business News http://finance.yahoo.com/news/fast-traders-getting-data-sec-235200711.html