Marketwired said it will stop selling direct feeds to high-speed traders, following rival Business Wire in the wake of a February Wall Street Journal report showing how the traders gain an advantage through newswire data.
New York Attorney General Eric Schneiderman announced a deal with Toronto-based Marketwired on March 19.
Business Wire said last month it will stop licensing direct feeds.
“This is another important step forward in bringing an end to Insider Trading 2.0," said Schneiderman. "I applaud Marketwired for doing the right thing and strongly encourage other industry participants to follow their lead.”
So-called high-frequency trading firms were able to take advantage of a sub-second difference between the time when Marketwired released information directly to its subscribers and the time when various news aggregators received and delivered the information.
In a Feb. 7 report, the Journal showed how high-speed traders used direct feeds from MW and BW to their advantage, a practice the paper called "gaming the system."