BTIG Files $200 Million Suit against StoneX for Alleged Code Theft

<p>The US
brokerage firm BTIG LLC filed a lawsuit yesterday (Monday) accusing rival firm
StoneX Group Inc. of stealing its proprietary software code and other trade
secrets related to its equities trading technology. According to the lawsuit
filed in California state court, BTIG is seeking at least $200 million in
damages.</p><p>BTIG has alleged that StoneX recruited a team of BTIG traders and software developers to
take BTIG's proprietary information and use it to build competing trading
products and business lines.</p><p>StoneX Employees Allegedly
Stole and Encrypted Code</p><p>According
to the lawsuit, at least one former BTIG employee encrypted the company's code and
emailed it to himself to avoid detection. BTIG's lawyers cited text messages in
the complaint between two former employees, one who had recently left BTIG for
StoneX, that appear to reference stealing BTIG's code.</p><p>Chris
Amato, a former <a href="https://www.financemagnates.com/tag/btig/" target="_blank" rel="follow">BTIG </a>employee, was hired by StoneX in December 2020.
Subsequently, the company is said to have taken over five more developers from
the broker. However, the infringements were detected in January 2023.</p><p>"The
eagle has landed, code extracted," one of the employees allegedly texted
after leaving BTIG.</p><p>BTIG said it had first discovered the theft when it came across a separate lawsuit between
StoneX and a former employee. In that case, the employee alleged StoneX's code
contained references to BTIG's systems and employee names.</p><blockquote><p lang="en" dir="ltr">BLOOMBERG: BTIG Accuses Rival Broker StoneX of Stealing Trading Technology <a href="https://t.co/BzjhB7jdzi">pic.twitter.com/BzjhB7jdzi</a></p>— News and Market (@newsandmarket) <a href="https://twitter.com/newsandmarket/status/1724269459580355032?ref_src=twsrc%5Etfw">November 14, 2023</a></blockquote><p>Seeking Injunction and
Damages</p><p>In addition
to monetary damages, BTIG has requested that the court issue an injunction to prevent
StoneX from using or disclosing BTIG's proprietary information. The case occurs
as Anton LeRoy <a href="https://www.financemagnates.com/institutional-forex/btig-announces-leadership-changes-anton-leroy-takes-charge-as-ceo/" target="_blank" rel="follow">has taken over as the company's president</a>, replacing Scott Kovalik.</p><p>BTIG
specializes in trading stocks and ETFs for institutional investors. According
to the lawsuit, StoneX recruited BTIG employees in 2020 as it sought to build
its own <a href="https://www.financemagnates.com/terms/e/equities/">equities</a> trading business.</p><p>"Defendant
StoneX recruited a team of BTIG traders and software engineers to exfiltrate
BTIG software code and proprietary information and take it to StoneX," BTIG
lawyers stated in the lawsuit.</p><p>According
to Reuters and Bloomberg, which first reported the story, StoneX has not yet
commented on the lawsuit. The case was filed in California Superior Court, San
Francisco County.</p><p>For StoneX, these are not the only legislative issues. In September, the
<a href="https://www.financemagnates.com/terms/c/cftc/">CFTC</a> charged the company for <a href="https://www.financemagnates.com/institutional-forex/cftc-imposes-fine-on-stonex-for-alleged-disclosure-breach/" target="_blank" rel="follow">alleged disclosure breaches</a>. The company was also
involved in an insider trading scandal related to a $236 million deal involving
<a href="https://www.financemagnates.com/forex/gain-capitals-236-million-deal-that-led-to-an-insider-trading-scandal/" target="_blank" rel="follow">the acquisition of GAIN Capital</a>.</p>

This article was written by Damian Chmiel at www.financemagnates.com.