Jane Street and Millennium Management have reached a settlement in a lawsuit involving allegations of trade secret theft following the departure of two traders from the proprietary trading firm to the multi-strategy hedge fund, according to a report by Reuters.

The reports cites a federal court filing as revealing that the case, which was originally filed in April, was resolved on Thursday, with both firms agreeing to dismiss the matter.

Jane Street had accused former traders Douglas Schadewald and Daniel Spottiswood of stealing a proprietary trading strategy after their resignation to join Millennium in February. According to court documents, the strategy, which focused on India options, reportedly generated $1bn in profits for Jane Street in 2023, as revealed during a hearing.

The firm argued that the traders had been "intimately" involved in developing the lucrative strategy before their departure, raising concerns about potential misuse of confidential information.

Millennium Management, founded in 1989, manages over $70.2 billion in assets and operates as a multi-strategy hedge fund. Jane Street meanwhile, established in 2000, is known for its quantitative trading expertise and active role in global financial markets.

Details of the settlement have not been disclosed, and representatives for both firms declined to comment.