Global proprietary trading firm Jane Street Capital has taken legal action against multi-strategy hedge fund major Millennium Management and two former employees over the alleged theft of trader secrets, according to a report by the Financial Times.

The report cites a complaint filed in a federal court in Manhattan last Friday as revealing that Jane Street has accused Douglas Schadewald and Daniel Spottiswood, who left the firm to join Millennium earlier this year, of stealing a “highly valuable, unique, and proprietary” trading strategy.

In the complaint, Jane Street said that the firm's profits from the secret strategy dropped by 50% within a few weeks of Schadewald joining Millennium, and that a “new entity…started placing orders mirroring the trading strategy”.

Jane Street's suit alleges that, as well as misappropriating the strategy, Schadewald and Spottiswood also breached their confidentiality agreements, and aims to stop Millennium from using the strategy. Jane Street is also seeking unspecified damages, according to the report.