StoneX secures order prohibiting ex-GAA broker from disclosing trading info
A trade secrets lawsuit brought by StoneX Group Inc (NASDAQ:SNEX) against former Global Asset Advisors broker Jeffrey French concluded on May 18, 2021. Judge John Robert Blakey of the Illinois Northern District Court issued an order granting the parties’ motion for a permanent injunction as to French.
Let’s recall that 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 sought 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.
As FX News Group reported earlier this month, the parties in this case have reached a settlement, with a key term (and condition) of the settlement being the entry by the Court of a permanent injunction prohibiting the defendants from violating the terms of Jeffrey French’s restrictive covenants at issue.
It is also ordered that Jeffrey French and Ag Hedger, LLC, their agents, officers, employees, attorneys, and anyone that acts in concert or participation with them, are enjoined for two years hence from obtaining, disclosing, or using the plaintiffs’ customer lists and trading information, trading strategies, and marketing plans; and disparaging Plaintiffs and their business in communications with thirdparties, whether such communications be oral, written, or electronic.
A final judgment is entered in StoneX’s favor and the case is now closed.