The US brokerage firm BTIG LLC filed a lawsuit yesterday (Monday) accusing rival firm StoneX Group Inc. of stealing its proprietary software code and other trade secrets related to its equities trading technology. According to the lawsuit filed in California state court, BTIG is seeking at least $200 million in damages.
BTIG has alleged that StoneX recruited a team of BTIG traders and software developers to take BTIG's proprietary information and use it to build competing trading products and business lines.
StoneX Employees Allegedly Stole and Encrypted Code
According to the lawsuit, at least one former BTIG employee encrypted the company's code and emailed it to himself to avoid detection. BTIG's lawyers cited text messages in the complaint between two former employees, one who had recently left BTIG for StoneX, that appear to reference stealing BTIG's code.
Chris Amato, a former BTIG employee, was hired by StoneX in December 2020. Subsequently, the company is said to have taken over five more developers from the broker. However, the infringements were detected in January 2023.
"The eagle has landed, code extracted," one of the employees allegedly texted after leaving BTIG.
BTIG said it had first discovered the theft when it came across a separate lawsuit between StoneX and a former employee. In that case, the employee alleged StoneX's code contained references to BTIG's systems and employee names.
Seeking Injunction and Damages
In addition to monetary damages, BTIG has requested that the court issue an injunction to prevent StoneX from using or disclosing BTIG's proprietary information. The case occurs as Anton LeRoy has taken over as the company's president, replacing Scott Kovalik.
BTIG specializes in trading stocks and ETFs for institutional investors. According to the lawsuit, StoneX recruited BTIG employees in 2020 as it sought to build its own equities trading business.
"Defendant StoneX recruited a team of BTIG traders and software engineers to exfiltrate BTIG software code and proprietary information and take it to StoneX," BTIG lawyers stated in the lawsuit.
According to Reuters and Bloomberg, which first reported the story, StoneX has not yet commented on the lawsuit. The case was filed in California Superior Court, San Francisco County.
For StoneX, these are not the only legislative issues. In September, the CFTC charged the company for alleged disclosure breaches. The company was also involved in an insider trading scandal related to a $236 million deal involving the acquisition of GAIN Capital.
