Mitigating Financial Services Trade Secret Theft by Rogue Employees


Live Broadcast on April 25, 2017

The rogue insider employee with access to trade secrets is among the greatest, growing threat to financial services companies and investors. In an era of rapidly advancing information technology, rogue insiders can do far more damage far more quickly, and critical asset loss can occur in seconds. Gone are the days of physical security being adequate to protect the organization. The threat of critical asset theft or misuse through cloud-based and other technologies is now ever present.

Mark Sidoti and Jeffrey Nagel, specialists in complex commercial litigation, will discuss the current business environment and the steps companies can take to prevent, mitigate and respond to critical financial services asset theft by insiders. The discussion will focus on: (1) identifying the trade secrets, critical IP and other confidential information assets that require protection; (2) understanding the nature of the assets typically targeted and the who is likely to target them, (3) instituting and maintaining employment and operational safeguards for those critical assets and (4) determining the steps to take in the event of a breach of duty or security involving those assets.

This course is co-sponsored by Wolters Kluwer.

Key topics to be discussed:

  • Identification of Trade Secrets and Critical Assets
  • Assets Most often Misappropriated
  • Common Misappropriators
  • Operational Safeguards For Critical Assets (“Reasonable measures”)
  • Steps in the Event of Breach

Date / Time: April 25, 2017

  • 10:00 am – 12:00 pm Eastern
  • 9:00 am – 11:00 am Central
  • 8:00 am – 10:00 am Mountain
  • 7:00 am – 9:00 am Pacific

Choose a format:

  • Live Video Broadcast/Re-Broadcast: Watch Program “live” in real-time, must sign-in and watch program on date and time set above. May ask questions during presentation via chat box. Qualifies for “live” CLE credit.
  • On-Demand Video: Access CLE 24/7 via on-demand library and watch program anytime. Qualifies for self-study CLE credit. On-demand versions are made available 7 business days after the original recording date and are view-able for up to one year.



mark-sidotiMark Sidoti, Esq. – a commercial and products liability litigator and Chair of the Gibbons E-Discovery Task Force – draws on his more than 28 years of litigation experience to help his clients assess and surmount a wide range of business challenges that require savvy negotiation and, at times, aggressive litigation. Whether the issues revolve around contract disputes, financial services, restrictive covenants, corporate medical litigation, or products liability, Mr. Sidoti combines his litigation skills with a broad knowledge of e-discovery law and information governance principles to help his clients navigate the critical cost/benefit analysis involved in every litigation and to reach the most favorable resolution in the most economical way.

Mr. Sidoti is a Director in the Gibbons Products Liability and Business & Commercial Litigation Departments. His varied litigation practice focuses on business and healthcare litigation of all types. He has handled high stakes cases in various business areas, as well as high profile catastrophic injury, wrongful death, and wrongful birth cases in the corporate medical arena, specifically in the clinical laboratory industry. As Chair of the Gibbons E-Discovery Task Force, Mr. Sidoti heads an interdisciplinary group that provides counseling, training, and litigation-related assistance to companies on a full range of information management and e-discovery matters. He is a frequently sought educator and lecturer in both his primary disciplines – clinical laboratory risk and e-discovery/information governance. He practices before the state and federal courts of New York and New Jersey, as well as throughout the United States. He is listed in New York Super Lawyers among New York’s leading lawyers in the area of business litigation and is AV® Preeminent Peer Review Rated by Martindale-Hubbell.

jeffrey-nagelJeffrey Nagel, Esq. has experience in first-chair trial and appellate work. He concentrates his practice on business and commercial litigation, international and domestic arbitration, compliance, internal investigations, class actions, and general counseling. Mr. Nagel advises clients in areas involving securities law and regulation, contract disputes, competition law, anti-money laundering and FCPA compliance, international arbitration, private equity and hedge fund issues, employment law, real estate disputes, and a variety of general commercial issues.

Mr. Nagel has substantial experience working with financial institutions, including banks, hedge funds, and private equity firms. He has worked with both public and private companies, many of which are international in scope. His clients include large and well-known manufacturers, publishing and media companies, real estate companies, and insurance companies. He also works with mid-sized clients, advising them on business practices, compliance issues, pre-litigation corporate structuring, employment matters, and data security and privacy issues. Mr. Nagel’s practice includes corporate advisory work, internal investigations, regulatory counseling, mediation, arbitration, and litigation in state and federal courts, including appellate work.

Mr. Nagel serves on the firm’s Professional Development Committee, as a senior member of the firm’s Electronic Discovery Task Force, and as the co-editor-in-chief of the Gibbons E-Discovery Law Alert blog.

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On-demand CLE
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Section I. Introductory Comments
a) Introduce panelists
b) Scope discussion by topic

Section II. Identification of Trade Secrets and Critical Assets
a) Trade secrets definition
c) Defend Trade Secrets Act
d) Standardized definition of TS

Section III. Assets Most often Misappropriated
a) Proprietary trading systems, investment systems and business plans
b) Investment research, techniques, testing procedures and results
c) Proprietary computer code, software and programs (not open source or commercially available) including algorithms
d) Portfolio composition
e) Investor, customers and counterparty information, including investor preferences
f) Customer and trader lists
g) Non-public investment research
h) Company financial information

Section IV. Common Misappropriators
a) Identification of common misappropriates
b) Discuss motive, opportunity and ability
c) High level misappropriators
d) Lower level misappropriators
e) Technology misappropriators (code; software)

Section V. Operational Safeguards For Critical Assets (“Reasonable measures”)
a) Confidentiality Agreements
b) Employment Agreement Protections
c) Employee Manual/IT Policies
d) Email Monitoring
e) Data Access Restrictions
f) Separation Agreements
g) Exit Interviews
h) Collect and Secure All Company Property

Section VI. Steps in the Event of Breach
a) Initial Steps
        i. Awareness
        ii. Employee communication monitoring
        iii. Engage forensic expert assistance
        iv. Lock down of data access
        v. Litigation hold steps
        vi. Employee interviews
        vii. Notification to suspected misappropriator
        viii. Forensic email and documents review
b) Mediation vs Arbitration vs Litigation
c) Legal Action
        i. Consider an injunction
        ii. Consider the forum
        iii. Consider action against both ex-employee and new employer, and any other  non-affiliated co-conspirators
        iv. Violation of DTSA – confers federal jurisdiction
        v. Violation of Computer Fraud and Abuse Act – same
        vi. Other Possible Causes of Action
                › Injunctive relief
                › Breach of Contract
                › Breach of fiduciary Duty
                › Breach of Duty of Loyalty (“Faithless servant”)
                › Misappropriation of Confidential information
                › Misappropriation of Trade Secrets
                › Tortious Interference with Business Opportunities
                › Conspiracy