StoneX reaches settlement with former GAA broker in trade secrets case
StoneX Group Inc (NASDAQ:SNEX) has reached a settlement with former Global Asset Advisors broker Jeffrey French in a lawsuit concerning trade secrets. This becomes clear from a set of documents filed with the Illinois Northern District Court on May 7, 2021.
This is a non-solicit and misappropriation of trade secrets case. Jeffrey French was a broker for GAA, which was acquired by StoneX Group. GAA is an Illinois limited liability company with a headquarters in Chicago. It is a financial services firm specializing in commodity trading, execution and management services. It is a wholly owned subsidiary of GAIN Capital Holdings, Inc, which in turn is a wholly owned subsidiary of StoneX. StoneX Group is a successor in interest to GAA.
Mr French was hired to serve GAA clients and entrusted with GAA resources and confidential information. He signed an agreement that prohibits him from soliciting GAA’s customers for two years after his employment ends.
On January 29, 2021, Mr French voluntarily ended his broker relationship with GAA and, thereafter, GAA assigned new brokers to the accounts he previously serviced.
According to StoneX, before leaving, Mr French compiled GAA’s trade secrets, such as customer lists, trading habits, and pricing information. And on information and belief, he is making active use of the information to solicit GAA’s customers for his own benefit.
Mr French is alleged to have clandestinely contacted GAA’s customers, using GAA’s trade secrets—customer specific information, such as customer lists, trading habits, and profits and margins data—in order to solicit them for his new business, Ag Hedger. After gathering all of the GAA information he needed, establishing a new entity through which to compete, and lining up a guarantee from another entity, he resigned from GAA.
On investigation, StoneX further learned of Mr French’s contacts with those customers while still working for GAA, and that French set up Ag Hedger and was at least planning to solicit clients for over six months.
In this lawsuit, StoneX seeks that the Court enforce Mr French’s non-solicitation obligations, prevent the further misappropriation of GAA’s trade secrets, and prevent the irreparable harm that follows from such violations.
Details of the settlement between the parties are not clear at this point. The parties have said the agreement is confidential. What FX News Group knows is that a key term (and condition) of the settlement is the entry by the Court of a permanent injunction prohibiting the defendants from violating the terms of Jeffrey French’s restrictive covenants at issue.
Thereafter, the parties will jointly move for the dismissal of the litigation pursuant to Fed. R. Civ. P. 41(a)(2).