Wednesday, June 15, 2011, 6/15/2011 09:24:00 AM

AllianceBernstein Claims Customers' Names, Addresses, Tax ID #s Are AllianceBernstein's Trade Secrets

By Todd

Law360 is reporting that AllianceBernstein has sued one of its former financial advisers with a contract suit in New York state court on Monday, accusing him of using the investment firm's trade secrets to solicit clients on behalf of his new employer, UBS Financial Services.

Defendant David Moran worked for AllianceBernstein from 2001 until Friday, when he abruptly quit and immediately signed on with competitor UBS, according to the complaint. The trade secrets at issue — which include confidential information like client contact information and net worth, as well as marketing techniques and investment strategies — are highly valuable, and the client information in particular could give a rival a virtual "gold mine" of potential clients, according to AllianceBernstein.

Now we have a question for you, our readers: the AllianceBernstein complaint says that the "trade secret information" includes each customer's "name, tax identification number, address, telephone number, account balance, asset allocation, income, net worth, place of employment, tax status . . . . " But, we ask you: how can that be? How can AllianceBernstein claim a trade secret property interest in their CUSTOMER'S information - especially considering that the customer could presumably, at any time, instruct AllianceBernstein that he/she wants their file and accounts transferred to another company and AllianceBernstein would have to comply? That's a weird type of trade secret, isn't it, when the trade secret itself is subject to someone else's instructions?

Give that one some thought, folks. The issue is whether banks and financial institutions actually own that data as trade secrets or, perhaps instead, alternatively they are just holders/keepers of the information until the client tells them otherwise.


Blogger supertom said...

bullshit question, clients have the right to give out the information, NOT the financial advisor

12:32 PM, July 14, 2011  

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