BLOGS: Trade Secrets Blog

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Friday, July 31, 2009, 7/31/2009 02:27:00 PM

Judge from Eaton Aerospace Trade Secrets Case to Plead Guilty to Lying to FBI in Unrelated Scruggs Attorney Fee Case

By Todd

We have reported about the Eaton Aerospace trade secrets matter before: http://wombletradesecrets.blogspot.com/2009/01/federal-indictments-in-eaton-aerospace.html. That report was about the criminal indictments of the former employees. But there was a civil case between Eaton Aerospace and Frisby, too.


In the civil case, the trade secrets allegedly misappropriated and at issue relate to hydraulic pumps and motors for military and commercial aerospace applications. The five former employees -- Rodney Case, Kevin Clark, Mike Fulton, Douglas Murphy and James Ward -- are co-defendants with Frisby (now known as Triumph Actuation Systems).


The judge assigned to the case was Judge Bobby DeLaughter. Judge DeLaughter's former boss and mentor is a Mississippi attorney named Ed Peters, an attorney who formerly represented Eaton as local counsel in the trade secrets case. Well, Judge DeLaughter is allegedly pleading guilty to lying to the FBI in an investigation of his judicial conduct in an unrelated case. DeLaughter has apparently admitted to lying to an FBI agent investigating a legal fees dispute lawsuit he was assigned to involving former mega-attorney attorney Dickie Scruggs. Peters is alleged to have played a key role in the Scruggs' rulings from Judge DeLaughter. Here is a copy of the indictment of DeLaughter: http://letterofapology.com/wp-content/uploads/2009/02/010609-delaughter-indictment.pdf.

We note that Frisby's attorneys maintain rulings from DeLaughter began going in Eaton's favor when Peters became one of Eaton's attorneys - but we've not reviewed any reliable evidence that substantiates this allegation. If Frisby attorneys can prove DeLaughter was improperly influenced by Peters and Eaton knew about it, Eaton's lawsuit and previous rulings made by DeLaughter could be reviewed and/or overturned. What's clear is that DeLaughter's plea is making a mess of things down in Mississippi.

Eaton attorneys and officials have said the company hasn't done anything wrong. They said if Peters did anything improper, it was without the company's knowledge. Peters has not been charged with any criminal wrongdoing, but he voluntarily relinquished his law licenses.


What ultimate impact Judge DeLaughter's guilty plea with have on this civil misappropriation case can only wait to be seen. We'll report back.
AUTHOR'S NOTE ON REVISION TO TEXT OF THIS BLOG POST:
We inadvertently reported that the indictments against the five former Eaton Aerospace employees had been "thrown out" by the federal judge assigned to the matter. This was incorrect. The five indictments have not been thrown out. See: http://www.clarionledger.com/article/20090804/NEWS/90804014/Miss.+trade+secrets+trial+postponed United States District Judge Barbour has continued the trial date in this matter, noting: "The court enters this order based on the court's finding that this case is so unusual and complex due to the nature of the prosecution, the number of defendants, and the volume of discovery that it is unreasonable to expect adequate preparation for pretrial proceedings or for the trial itself within the time limits established by the Speedy Trial Act." Our apologies for the error - although some of the indictments were originally dismissed, a number of the indictments stand and trial of these matters looks likely.

Wednesday, July 29, 2009, 7/29/2009 01:05:00 PM

Rio Tinto Executives Jailed By China - Accused of Theft of Trade Secrets

By Todd

This report by Bloomberg.com is fascinating - executives on Rio Tinto's negotiating team have apparently been arrested and jailed by China during tough negotiations over China's desire to purchase much-needed iron ore from Rio Tinto:


Rio Tinto Group is known for playing hardball when negotiating iron-ore prices, prompting Japanese steelmakers to present the company with a faceless doll as a tribute during one round of talks.

“The gift signaled how tough Rio had played the negotiations,” Doug Ritchie, the London-based company’s global head of strategy, said in May. Now Rio faces higher stakes in China, which overtook Japan in 2003 as the world’s biggest buyer of iron ore, and this month arrested four of the company’s executives as annual price talks with Chinese mills stalled.

China, destination for half of the $52 billion global seaborne iron ore trade, has accused four members of Rio’s iron ore team in Shanghai, including Australian Stern Hu, of stealing state secrets. Hu’s detention by Chinese security officials is related to a criminal probe into the talks, Australia’s foreign minister Stephen Smith said this month.

“What they appear to be wanting to do, in classic Stalinist fashion, is discipline the steel industry and intimidate their negotiating partners at the same time,” said Paul Monk, founder and director of Austhink Consulting in Melbourne, and former China analysis head at Australia’s Defence Intelligence Agency. “From a point of view of a state that is trying to establish its credentials in the market economy of the world, it is a really stupid thing to have done.”


What are these "state secrets"? Well, China purchases approximately $25 billion worth of iron ore a year right now. According to Chinese state media, Hu and three other Rio Tinto employees who are also detained, are accused of bribing employees of Chinese steel companies to obtain confidential information on China's negotiating strategy.


IF CHINA'S NEGOTIATING STRATEGY WAS ACQUIRED, WHO IN CHINA GAVE IT TO RIO TINTO? INQUIRING MINDS WANT TO KNOW . . . .

Tuesday, July 28, 2009, 7/28/2009 09:50:00 AM

Former Citadel Employees Defend Claiming "Trade Secrets? What Trade Secrets?"

By Todd

Now The Wall Street Journal is reporting that three former employees of Citadel Investment Group have filed a motion to dismiss the hedge-fund company's complaint against them, claiming their formation of a new trading firm didn't violate agreements they made with Citadel upon leaving the firm.
Lawyers for Mikhail Malyshev, Jace Kohlmeier and Matthew Hinerfeld, who founded Teza Technologies LLC earlier this year, filed the motion last Friday in Cook County, Ill., Chancery Court.

Teza is the firm that hired Sergey Aleynikov, the ex-Goldman Sachs Group, Inc. computer programmer arrested on charges of stealing secret computer trading code from his former employer. Mr. Aleynikov and his lawyer have asserted that any violation was unintentional.

In Teza's court filings, it said that the formation of a firm doesn't violate non-compete agreements, because all it took were "preparatory steps" and it is not competing with Citadel.
"There is nothing in the complaint suggesting that Teza or any of the individual defendants is engaging in any trading activities, investment activities, or other business activities conducted by Citadel," says the complaint.

Citadel sued Teza and the three ex-employees earlier this month, claiming Mr. Malyshev and Mr. Kohlmeier -- the former No. 1 and No. 2 in Citadel's high-frequency trading funds -- violated non-compete and other agreements it made with Citadel. It also named Mr. Hinerfeld, a former Citadel in-house lawyer, for violating other types of agreements. The suit also claimed "actual or threatened" misappropriation of Citadel trade secrets, tortious interference with existing contracts and breach of fiduciary duty.

Citadel said in early July that it only learned about the formation of Teza after it found that Teza had hired Mr. Aleynikof. A spokeswoman for Chicago-based Citadel said the firm had no comment on Teza's motion for dismissal.

As far as the allegations about misappropriating trade secrets and breaching fiduciary duty and non-solicitation agreements, Teza says Citadel doesn't have any specific facts backing those claims up, and should also be dismissed.
NOW, this is an interesting report and even more interesting defense. Three presumably highly compensated hedge fund guys, and a fourth $400,000 per year code programmer, all assembled themselves as a group - and only prepared to compete? If true, that probably means that their attorneys have advised them "competing during that noncompete clause's term is a no-no so you guys had better sit tight and ride this one out." The inclusion of the Goldman Sachs programmer in the mix - the alleged code thief - is the fact in this fact pattern that might give the court pause regarding these defenses. We'll continue to track this one for you.

Thursday, July 23, 2009, 7/23/2009 08:14:00 AM

Doh!!! ClearOne Trade Secrets Defendant Loses At Trial, Drops His Attorney and Asks for Stay of Judgment - But Is Told "Sorry"

By Todd

We covered the ClearOne Communications trial victory and $9.7 million verdict against some of its former employees here: http://wombletradesecrets.blogspot.com/2009/04/clearone-clears-97-million-in-trade.html.
It appears that one of those defendants, Lonny Bowers, fired his attorney and decided to take matters into his own hands to file a Rule 60 motion seeking to set aside or stay the judgment against him. Attached at the link above is the trial court's rejection of Mr. Bowers' Rule 60 motion.


It appears that Mr. Bowers claimed that ClearOne pulled a fast one on the court and the jury - that the "HoneyBee" computer code that was determined to be a trade secret of ClearOne is actually in the public domain. It appears that the court doesn't buy what Mr. Bowers is selling and consequently denied his motion.

Wednesday, July 22, 2009, 7/22/2009 02:19:00 PM

Military Rifle Designer Wins $1.8 Million in Trade Secrets Spat With Former Employee

By Todd

A federal jury awarded a West Bridgewater, Massachusetts based designer of products for small-arms weapons more than $1.8 million in damages in a lawsuit alleging theft of trade secrets and breach of fiduciary duty.

The lawsuit by the Atlantic Research Marketing Systems, or A.R.M.S. Inc., was lodged against Stephen P. Troy Jr. and his company, Troy Industries Inc., of Lee. You can find Troy Industries' version of G.I. Joe on its website here: http://troyind.com/.

Originally filed in August 2007, the claim by A.R.M.S. Inc. alleged that its former employee of seven months, Troy, had stolen trade secrets for a product used on certain military rifles and incorporated those trade secrets in a system that was being offered and sold by Troy Industries after he was fired from A.R.M.S.

On June 26, after a two-week trial in federal court, a nine-member federal jury found Troy and his company liable for misappropriation of trade secrets and breach of fiduciary duty.
Some other issues in the case remain pending before the court, the company said.

Monday, July 20, 2009, 7/20/2009 11:28:00 AM

China on Spy Charges: B**ch Set Me Up!


From CNN.Money, a report on the statement from the government of China regarding the recent conviction of former Boeing engineer, Dongfan "Greg" Chung, on economic espionage charges.


"The allegation that a so-called Chinese person stole trade secrets in the United States and gave them to China is purely a fabrication made up out of ulterior motives," the foreign ministry said in a short statement.


The ministry refused further comment on the case.


It’s not clear what the ulterior motives are, but the motives for denying it are fairly clear.

$36 Million Trade Secret Verdict Loser, Luna Innovations, Files for Bankruptcy

By Todd
Trade secrets trials have consequences. We covered this $36 million trade secret verdict here: http://wombletradesecrets.blogspot.com/2009/06/post-trial-motions-filed-in-363-million.html.

Now the defendant, Luna Innovations, has filed for bankruptcy protection in federal court in Virginia. As you might understand, the filing of the bankruptcy petition effectively stays the court proceedings in California where the trial court judge was supposed to consider post-trial motions to reduce, or increase, the jury verdict awarded. We understand that Hansen is claiming as much as $6 million in attorneys' fees in connection with the jury verdict. Instead of awaiting those decisions by the trial court, Luna Innovations decided to change the playing field from California to Virginia. What's interesting, to us at least, is that the $36 million verdict has not been entered a final judgement against Luna Innovations - thus Luna Innovations is going to be asking a federal bankruptcy judge in Virginia to examine and reduce the California state jury verdict which has not even been entered yet or appealed to the California appellate courts.

Luna Innovations motion to reduce the trial verdict can be reviewed here: http://newsroom.law360.com/articlefiles/112052-Luna_Motion.pdf.

We'll continue to report regarding this case.

Thursday, July 16, 2009, 7/16/2009 05:29:00 PM

FORMER BOEING ENGINEER CONVICTED OF ECONOMIC ESPIONAGE

From CNN, here's the full text of the Department of Justice press release:

IN THEFT OF SPACE SHUTTLE SECRETS FOR CHINA

SANTA ANA, Calif. - A former Rockwell and Boeing engineer from Orange County, Calif., was remanded into custody this morning after a federal judge convicted him of charges of economic espionage and acting as an agent of the People's Republic of China, for whom he stole restricted technology and Boeing trade secrets, including information related to the Space Shuttle program and Delta IV rocket.

Dongfan "Greg" Chung, 73, who was employed by Rockwell International from 1973 until its defense and space unit was acquired by Boeing in 1996, was found guilty by U.S. District Judge Cormac J. Carney, who presided over a three- week bench trial last month.

In his ruling read this morning in court, Judge Carney found Chung guilty of conspiracy to commit economic espionage, six counts of economic espionage to benefit a foreign country, one count of acting as an agent of the People's Republic of China and one count of making false statements to the FBI.

Immediately following the reading of the verdicts, Judge Carney remanded Chung into custody, where he will remain until his sentencing, which was scheduled for Nov. 9, 2009. Chung had been freed after being arrested by special agents with the FBI and investigators with NASA in February 2008.

Chung, a native of China who is a naturalized U.S. citizen, held a " secret" security clearance when he worked at Rockwell and Boeing on the Space Shuttle program. He retired from the company in 2002, but the next year he returned to Boeing as a contractor, a position he held until September 2006. At trial last month, the government proved that Chung took and concealed Boeing trade secrets relating to the Space Shuttle and the Delta IV rocket, materials he acquired for the benefit of the PRC.

David Kris, Assistant Attorney General for National Security, said: " For years, Mr. Chung stole critical trade secrets from Boeing relating to the Space Shuttle and the Delta IV rocket - all for the benefit of the government of China. Today's verdict should serve as a warning to others willing to compromise America's economic and national security to assist foreign governments.
The many agents, analysts and prosecutors who worked on this important case deserve special thanks for their efforts."

"Mr. Chung stole restricted technology for the benefit of a foreign nation, and as a result he has lost the freedom he was offered by this nation," said U.S. Attorney Thomas P. O'Brien. "The stolen technology compromised not only the American company that developed and owned the trade secrets, but national security as well because the secrets could be used by the PRC to develop its own military technology."

Salvador Hernandez, Assistant Director in Charge of the FBI in Los Angeles, stated: "The cost of Mr. Chung's traitorous actions to American security and the economy cannot be quantified, but have now been exposed, and his ability to exploit critical technology has come to an end. FBI counter- intelligence agents and NASA received the full cooperation of the Boeing Company in building this three-year investigation, the successful outcome of which marks the first conviction by trial under the Economic Espionage Act of 1996. I'm confident this milestone conviction will serve as a deterrent to would-be spies contemplating theft of precious U.S. secrets."

The case against Chung resulted from an investigation into another engineer who worked in the United States and obtained sensitive military information for the PRC. That engineer, Chi Mak, and several of his family members were convicted of providing defense articles to the PRC. Chi Mak was sentenced last year to more than 24 years in federal prison (see: http:// www.usdoj.gov/usao/cac/pressroom/pr2008/032.html).

According to the evidence presented during the trial, individuals in the Chinese aviation industry began sending Chung "tasking" letters as early as 1979. Over the years, the letters directed Chung to collect specific technological information, including data related to the Space Shuttle and various military and civilian aircraft. Chung allegedly responded in one undated letter that "I would like to make an effort to contribute to the Four Modernizations of China." In various letters to his handlers in the PRC, Chung referenced engineering manuals he had collected and sent to the PRC, including 24 manuals relating to the B-1 Bomber that Rockwell had prohibited from disclosure outside of the company and "selected federal agencies."

Between 1985 and 2003, Chung made multiple trips to the PRC to deliver lectures on technology involving the Space Shuttle and other programs, and during those trips he met with PRC government officials, to include agents affiliated with the People's Liberation Army. Chung and PRC officials exchanged letters that discussed Chung's travel to China and recommended methods for passing information, including suggestions that Chung use Chi Mak and his wife Rebecca to transmit information. A May 2, 1987, letter from Gu Weihao, an official in the Ministry of Aviation and China Aviation Industry Corporation, discussed the possibility of inviting Chung's wife, who is an artist, to visit an art institute so that Chung could use her trip as an excuse to travel to the PRC. This same letter suggested that passing information to the PRC through Chi Mak would be "faster and safer" and concluded with the statement: "It is your honor and China's fortune that you are able to realize your wish of dedicating yourself to the service of your country."

On Sept. 11, 2006, FBI and NASA agents searched Chung's house and found more than 250,000 pages of documents from Boeing, Rockwell and other defense contractors inside the house and in a crawl space underneath the house. Among the documents found in the crawl space were scores of binders containing decades' worth of stress analysis reports, test results and design information for the Space Shuttle.

Each charge of economic espionage carries a maximum possible penalty of 15 years in federal prison and a $500,000 fine. The charge of acting as an agent of a foreign government carries a maximum penalty of 10 years imprisonment and a $250,000 fine. The charges of conspiracy to commit economic espionage and making false statements to federal investigators each carry a maximum possible penalty of five years imprisonment and a $250,000 fine.

In this morning's ruling, Judge Carney acquitted Chung of one count of obstruction of justice.
The investigation in this case was conducted jointly by the FBI and NASA Counterintelligence. The case was prosecuted by Assistant U.S. Attorneys Greg Staples and Ivy Wang.

Wednesday, July 15, 2009, 7/15/2009 08:32:00 AM

The Trade Secrets of Trading Profits Made in Milliseconds

By Todd

Fortune's William Cohan has penned an interesting piece on a hot topic in trade secrets circles right now: what are these code-based trade secrets that these people are alleged to be stealing from big outfits like Goldman Sachs and UBS? The answer, it appears, is computer code that enables these firms to make bags of cash trading faster and better than their competition.


Cohan notes:


The reason that trade secrets are so highly coveted in this world is that firms like Teza and GETCO use their own money to exploit tiny discrepancies in the price of securities from one millisecond to the next. When it comes to computer-driven mega-trades, milliseconds count.


For instance, a typical trading strategy for GETCO and its ilk would be to exploit the momentary pricing differences between a stock index -- say the S&P 500 -- and the stocks that comprise that index. It's a new form of arbitrage that relies primarily on proprietary computer programs, high-speed computers in huge data centers and proximity to various exchanges to be able to get the proprietary information before competitors via high-speed fiber optics cables.

"Electronic routing and execution has become the mechanism by which our capital markets operate," according to a recent report by Robert Iati, a partner at TABB Group. "Algorithms account for more than 25% of all shares traded by the buy side today -- a number steadily rising for several years now." Iati said that the "incredible capabilities" offered by technology have given meteoric rise to a relatively few high frequency proprietary trading firms, and that familiar names like "Merrill [Lynch] are being replaced by less familiar ones like Wolverine, IMC and Getco."

In an interview with Fortune, Iati recounted how these proprietary trading companies are vying to locate as close to the New York Stock Exchange's new multi-million-dollar data center -- being built in Mahwah, N.J. and set to open in 2010 -- as they can to get the information about trading activity as quickly as possible. "Proximity is everything now," he said, since the data travels over fiber-optic cables at light speed and the less distance it travels, the more quickly it arrives, and the more quickly the price discrepancies can be exploited.


Do source code strings that are designed to capture millisecond derived profits in trading satisfy the definition of a "trade secret"? You betcha.

Tuesday, July 14, 2009, 7/14/2009 01:29:00 PM

First Goldman Sachs, Now UBS: Another Allegation of Departing Employee Trade Secret Theft of Source Code

By Todd

SecuritiesIndustry.com is reporting that Goldman Sachs is not the only Wall Street firm taking an ex-employee to court with the charge of theft of trade secrets in the form of valuable, proprietary trading code.

Swiss bank UBS AG confirmed Monday that it filed papers in March charging three ex-employees with “misappropriation of trade secrets.” The “misappropriation” included 25,000 lines of source code used in UBS’s “trade secret algorithmic trading programs,” according to documents submitted with the New York State Supreme Court.

The bank is charging three former employees in the firm’s algorithmic trading group of having “collectively coordinated and planned together” to move to new jobs at New York-based Jefferies & Company while still technically in the employee of UBS, taking with them UBS trade secrets, breaching their employment contracts and fiduciary duties and resulting in unfair competition.

The three charged are: Jatin Suryawanshi, the former managing director and head of the unit; Partha Sarkar, an executive director and Sanjay Girdhar, a group director. In June, Jefferies publicly announced that Saryawanshi had joined the firm as a managing director and head of its global quantitative strategies trading unit while Sarkar and Girdhar had joined the unit as senior vice presidents.

Monday, July 13, 2009, 7/13/2009 11:58:00 AM

Arcade-Game Software Theft Alleged - Former Owner of UltraCade Technologies Indicted

By Todd


The San Francisco Chronicle is reporting that two men have been indicted by a federal grand jury on charges that they stole arcade-game software belonging to a San Jose company.

David Russell Foley of Los Gatos and Michael Daddona were named in a 35-count indictment unsealed this week. The indictment, handed up July 1 by a grand jury in San Jose, includes charges of conspiracy, trafficking in counterfeit goods, theft of trade secrets, mail and wire fraud, conspiracy to commit money laundering and bank fraud.

Foley pleaded not guilty Wednesday and was released on $100,000 bond.

Foley owned UltraCade Technologies in San Jose, which produced game packs, collections of video games that could be loaded onto arcade video-game machines. Foley sold his company and its intellectual property to Global VR of San Jose in June 2006.

But just before he sold UltraCade, Foley made game packs at his home using a burner stolen from UltraCade, the indictment said.

Foley was fired from the company, but for the next two years, he kept the proprietary code and trade secrets now belonging to Global VR and "secretly manufactured and sold game packs with counterfeit markings belonging to Global VR for his own financial benefit," the indictment said.

In doing so, Foley stole the code that enabled consumers to play Global VR games - as well as those licensed to other companies including Namco, Nintendo and Taito - on video-arcade game platforms belonging to Global VR, authorities said.

Foley sold the game packs he made to Automated Services, a Connecticut arcade-game company owned by Daddona, the indictment said. Daddona advertised the game packs on eBay at a lower price and sold them to customers across the country, authorities said.

Foley also sold a burner to Daddona, enabling Daddona to make game packs, the indictment said.

Thursday, July 09, 2009, 7/09/2009 03:18:00 PM

Citadel Investment Group Sues Three Former Employees for Noncompete Breach and Trade Secrets Misappropriation Risk

By Todd

Reuters is reporting that Citadel Investment Group, one of the world's most successful hedge fund firms, has today sued a former top executive in its highly successful quantitative trading unit and two others for setting up their own firm.

Chicago-based Citadel, founded by 40-year-old billionaire Kenneth Griffin, said in a lawsuit filed on Thursday that Mikhail Malyshev, 40, and two other former employees had violated their non-compete clauses by starting their own firm, Teza Technologies LLC. The lawsuit was filed in the the circuit court of Cook County, Illinois.

Teza Technologies made headlines this week when it was identified as the firm that had hired Sergey Aleynikov, a former Goldman Sachs Group Inc. computer programmer whom federal prosecutors had accused of stealing trade secrets from the Wall Street investment bank.
Malyshev, a Russian emigre with a doctorate in astrophysics from Princeton, left Citadel's quantitative trading unit in February after the funds he helped run returned about 40 percent last year. Their performance stood out at a time when most hedge funds lost money and Citadel's flagship portfolios tumbled 50 percent.

Citadel, which manages $11 billion and one of whose flagship hedge funds returned an average 20 percent per year between 1998 and 2006, said it zealously guards the secrecy of its own computer codes. The hedge fund firm said it spent hundreds of millions of dollars to develop strategies, software and hardware, or what is sometimes referred to as the "secret sauce" of the high frequency business, court papers show.

If the information were obtained by someone else, the company, which has often been compared with Goldman Sachs for its trading prowess, said it would suffer irreparable harm.

"Defendants' activities, particularly Teza's decision to hire Aleynikov, an accused software thief, create a substantial risk that they have stolen, or may be planning to steal, Citadel's proprietary code," the hedge fund firm said in court papers.

Like all employees who leave Citadel, Malyshev faced a nine-month non-compete clause and was being paid $30,000 a month to sit out the period to at least November 2009, court papers show. Citadel found out about Malyshev's new firm only this week after Aleynikov was arrested, the firm said..

Former Citadel employees Jace Kohlmeier and Matthew Hinerfeld are also listed on the civil complaint.

A spokesman for Teza called the suit "frivolous" and said it "appears to be timed to harass Teza executives."

"We knew nothing about the theft of Goldman's software until it hit the press in connection with the arrest," said Chris Gair, Teza's lawyer. "We immediately started working with the FBI. We are not going to compromise anyone's proprietary information."

Wednesday, July 08, 2009, 7/08/2009 10:36:00 AM

Lindsay Lohan Makes Trade Secrets News

By Todd

Link to article


Courthouse News Service is reporting that Hollywood actress Lindsay Lohan has been sued for trade secret misappropriation.


Lindsay Lohan "publicly proclaimed" that she invented a sunless secret" tanning spray, but she actually swiped the formula from White Wave International, the skin-care company claims in a complaint filed in federal court in Tampa, Florida. White Wave owner Jennifer Sunday says she sent samples of her spray to Lohan's business partner, Lorit Simon, when the defendants were researching sunless tanning formulas.


After executing a confidentiality agreement, White Wave says, Simon discussed buying a shipment of Sunday's spray, but the deal fell through when they couldn't agree on the price.


Later, Simon and Lohan announced the release of Sevin Nyne, a self-tanning mist with identical ingredients to Sunday's formula, according to the complaint. Lohan and Simon, a Las Vegas businesswoman who air-brushes tans for celebs, launched Sevin Nyne in May, claiming it took them three years to create it.


Simon and Lohan allegedly issued press releases claiming that they created the product together.


White Wave also sued Simon's company, Lorit LLC, Crossheart Productions, and Shawn Lampman, alleging theft of trade secrets, unfair and deceptive trade and interference with contract.

Monday, July 06, 2009, 7/06/2009 09:48:00 AM

Goldman Sachs Ex-Employee Accused of Stealing Trading Methodology Data and Codes

By Todd





This could prove to be a whopper in the world of trade secret theft and international economic espionage. Reuters, and many other sources, are reporting that the FBI has arrested Sergey Aleynikov, a Russian immigrant living in New Jersey and a former employee of Goldman Sachs.


The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major “financial institution” generate millions of dollars in profits each year.

The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.
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