Jane Street Millennium Lawsuit: Trade Secrets Case and Aftermath

The Jane Street Millennium lawsuit was a trade secrets case filed in April 2024 in Manhattan federal court, in which the quantitative trading firm Jane Street Group accused hedge fund Millennium Management and two former Jane Street traders, Douglas Schadewald and Daniel Spottiswood, of stealing a proprietary options strategy that had generated roughly $1 billion in profits from Indian derivatives markets in 2023. The case settled in December 2024 on undisclosed terms, with both traders remaining at Millennium.¹

What Jane Street Accused Millennium and the Traders of Doing

Schadewald headed Jane Street’s SPX options desk from October 2018 until his resignation in February 2024. Spottiswood interned in 2018 and worked at the firm full-time from August 2020 until he also resigned that same month. Both moved to Millennium, where Schadewald was reportedly offered millions of dollars to make the jump. The traders later said they left largely because they were unhappy with their compensation at Jane Street.³ Jane Street alleged that after the two traders left, its profits from the strategy dropped by 50% in March 2024, and that Millennium had built a dedicated pod to replicate the approach using Schadewald and Spottiswood.⁴

The defendants told a different story. Their lawyer, Rollo Baker of Elsberg Baker & Maruri, argued the profit decline was better explained by lower market volatility and fewer trading days than by any theft. Baker also said Millennium’s profits in the same market segment during the relevant period were roughly $4 million, compared with Jane Street’s $185 million — about 50 times less.⁵ The traders’ central argument was that the strategy was built on their own professional experience, not on secret algorithms or automated signals they carried out the door.¹

Why the Case Turned on Trade Secret Law

Jane Street does not require its employees to sign non-compete agreements. The firm views that policy as central to its collaborative culture and low turnover, but it left the company without a straightforward contractual tool to stop departing traders from joining a rival.⁶ That is why the lawsuit rose or fell on trade secret law rather than on any bar to the traders’ new employment.

The complaint was filed on April 10, 2024, in the Southern District of New York, case number 1:24-cv-02783, before Judge Paul A. Engelmayer. Jane Street brought claims under the federal Defend Trade Secrets Act, state trade secret misappropriation, and breach of contract.⁷ To win, Jane Street had to prove that something specific and protectable had been taken, not just that talented people had left and kept doing what they were good at.

What Happened in Court

Jane Street’s opening move was a request for a temporary restraining order to stop Millennium from using the strategy. Judge Engelmayer denied it on April 19, 2024, finding no showing of irreparable harm. He told the parties the claims were “undeniably serious” but that Jane Street had “identified smoke but hasn’t established a fire.”⁵ Jane Street dropped its request for injunctive relief on April 26 and narrowed the case to monetary damages.

Confidentiality fights ran through the whole litigation. Jane Street initially asked the court to close the courtroom during the TRO hearing. Judge Engelmayer refused, calling the firm’s presumption of secrecy “way too broad” and criticizing its attempt to redact even the country where the trading took place. Despite his warnings, lawyers at the hearing inadvertently revealed that the strategy involved options trading in India.⁸ The court did agree on April 17 to seal filings containing detailed descriptions of Jane Street’s proprietary tools and variables, while pushing the parties to negotiate redactions that would still let the public follow the case.⁹ In May, Judge Engelmayer ordered Jane Street to identify each claimed trade secret in a detailed, numbered list and to share that identification with the former traders.¹⁰

The defendants pushed back with affirmative defenses and a counterclaim. Millennium alleged Jane Street had sued in “bad faith” with the “sole goal of harming a rival’s business and reputation.”¹¹ On July 10, 2024, Judge Engelmayer struck the defenses of unclean hands, waiver, and estoppel. On unclean hands, he found the defendants had not alleged “unconscionable” conduct directly related to acquisition or use of the trade secrets. On waiver and estoppel, he noted those defenses rested on Jane Street’s choice not to enforce non-competes, but the suit was about breach of confidentiality, not violation of a non-compete. Eighteen other defenses framed as denials of liability were left in place.¹² On July 19, the judge dismissed Millennium’s unfair competition counterclaim.

How the Case Ended

Discovery moved on an expedited schedule and began surfacing material both firms preferred to keep private, including text messages in which Schadewald had allegedly criticized Millennium’s own trading strategies.¹ On December 5, 2024, the parties filed a joint stipulation of voluntary dismissal. Judge Engelmayer signed the order the next day, dismissing all claims and defenses with prejudice, with each side bearing its own costs and fees.¹³

A Jane Street spokesperson said the matter had been “resolved on mutually agreeable terms.” Neither side disclosed the financial terms.¹⁴ Schadewald and Spottiswood continued to work at Millennium after the settlement. Because the case ended before trial, no judicial ruling was issued on the underlying legal question of whether quantitative trading strategies and algorithms qualify for protection under the Defend Trade Secrets Act.¹⁵

The India Regulatory Aftermath

The lawsuit’s public filings revealed the scale and character of Jane Street’s India options trading, and that disclosure drew the attention of the Securities and Exchange Board of India. On July 3, 2025, SEBI issued a 105-page interim order accusing four Jane Street-linked entities of manipulating the Bank Nifty index on 18 derivative expiry days between January 2023 and March 2025.¹⁶

SEBI described a two-phase pattern. In the morning session, Jane Street entities aggressively bought Bank Nifty component stocks above the last traded price to push the index higher while building short positions in index options. In the afternoon, they reversed, selling stocks and futures to drive the index down and profit from the short positions at expiry. The regulator called the conduct a “deliberately devised device” to manipulate settlement prices and ordered the entities to deposit roughly 4,843.57 crore rupees, about $554 million, into escrow as unlawful gains. SEBI also imposed a trading ban and froze the entities’ accounts.¹⁶

Jane Street complied with the escrow requirement on July 14, 2025, while formally reserving its right to challenge the order. The firm said its trading was “basic index arbitrage trading” and denied the manipulation allegations.¹⁷ On July 21, 2025, SEBI announced that the trading ban and account restrictions would cease to apply pending further proceedings, though Jane Street reportedly indicated it did not intend to trade Indian options until the dispute was resolved.¹⁶

1
Claims Journal. Jane Street Millennium Settlement
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Claims Journal. Jane Street Millennium Settlement
The strategy at issue involved short-term index options on India’s National Stock Exchange and Bombay Stock Exchange. In its amended complaint, Jane Street described the approach as its most valuable intellectual property, made up of validated trading methods, machine learning architectures, proprietary signal information, and intra-day models built on bespoke training data. The firm said it had spent tens of millions of dollars developing the strategy between 2018 and 2023.2Seward & Kissel LLP. Jane Street Amended Complaint
4
The Fashion Law. The $1B Jane Street Clash Shows the High Stakes of Intangible Assets
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Business Insider. Jane Street’s Billion-Dollar Trade Secrets Emerge in Court
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eFinancialCareers. Citadel Securities vs Jane Street
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Bloomberg Law. Jane Street v. Millennium Court Filing
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Bloomberg. Jane Street’s Secret Strategy Concerns India, Hearing Reveals
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Justia. Jane Street v. Millennium, Filing 14
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Inner City Press. Jane Street v. Millennium, May 16 Proceedings
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Bloomberg. Jane Street Gets Millennium Trade Secrets Countersuit Dismissed
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Bloomberg Law. Jane Street v. Millennium, Opinion and Order
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PACER Monitor. Jane Street Group v. Millennium Management
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Financial Times. Jane Street and Millennium Settle Trade Secrets Dispute
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Asia IP Law. Can a Trading Strategy Be Protected as a Trade Secret
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Oxford Business Law Blog. Jane Street and the Expiry Day Trap: Unpacking SEBI’s Crackdown on Algorithmic Trading
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Reuters. Jane Street Deposits $567 Million in Escrow Accounts Per India Regulatory Directives