I'm not sure this is really much of a scandal. HFT / algo-trading firms are generally trying to make a buck on market momentum, not fundamentals.
Investors who take time to actually read and interpret financial statements, if they're good, can observe-orient-decide-act quickly, but 100 seconds does not provide much of an advantage.
To the extent that there is a surprise in the Q or K, it's usually divulged ahead of time in a revised earnings guidance by the company itself (albeit this doesn't always happen when the surprise is to the upside).
Either way, the equity hedge funds that care about the details of financial statements don't get their edge from a one-minute head start on reading these statements; they get it from paying shady "industry consultants" to feed them scuttlebutt.
HFT / algo-trading firms are NOT generally trying to make a buck on market momentum. They're generally trying to make a buck by market making. They're buck (or penny really) comes from the bid/ask spread.
Tomato, tomato. They're trying to make markets quicker than anyone else which requires a split-second understanding of directional trends in the spread, i.e., momentum.
I don't think it would be that hard to have a computer program scrape a form, compare it to industry predictions and take a position in well under a second.
Public companies almost always release the headline numbers -- revenue, EBITDA, net income -- ahead of the bell, so your "compare to predictions" argument is mostly moot.
In terms of building something automated to examine the detailed line-items and automatically trade based on any analysis done, that would be incredibly hard in its own right, and practically impossible once you factor in scrubbing for one-time charges.
Investors who take time to actually read and interpret financial statements, if they're good, can observe-orient-decide-act quickly, but 100 seconds does not provide much of an advantage.
To the extent that there is a surprise in the Q or K, it's usually divulged ahead of time in a revised earnings guidance by the company itself (albeit this doesn't always happen when the surprise is to the upside).
Either way, the equity hedge funds that care about the details of financial statements don't get their edge from a one-minute head start on reading these statements; they get it from paying shady "industry consultants" to feed them scuttlebutt.