Citadel Securities lawsuit proceeds against former employees’ crypto startup

The US District Court docket in Manhattan has dominated that the lawsuit towards Citadel Securities, accusing crypto buying and selling startup Portofino of stealing the corporate’s commerce secrets and techniques, can largely proceed.

In line with a lawsuit filed on October 30, the Manhattan District Court docket has agreed to maneuver ahead with Citadel’s lawsuit towards crypto buying and selling startup Portofino, which created the 2 former Citadel Securities staff accused of stealing commerce secrets and techniques to type the startup.

The choose partially denied Portofino’s request to dismiss the case, however he did the identical with Citadel Securities’ claims that Portofino violated the employment contracts of three Citadel Securities staff it tried to recruit.

Beforehand, Citadel Securities alleged that Portofino’s hiring of the agency’s systematic choices dealer, Taym Moustapha, violated his worker contract. It additionally said that the corporate was compelled to pay “considerably elevated compensation” to an unnamed worker to overshadow Portofino’s provide.

The choose dismissed Citadel Securities’ claims concerning Moustapha and two unidentified staff, however allowed the corporate to file an amended grievance to fill the gaps the court docket famous in the course of the convention. The court docket gave Citadel Securities as much as 30 days to refile the grievance.

In the meantime, one other declare filed by the corporate involving one other worker was allowed to proceed.

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Nonetheless, on October 31, the court docket granted Portofino’s request to dismiss Citadel’s case involving a seed investor.

“As a result of Plaintiffs haven’t proven that Defendant anticipated or fairly ought to have anticipated that his funding in Portofino would have an effect in New York,” U.S. District Choose Gregory Woods wrote within the court docket doc.

Woods additional defined that the court docket had no jurisdiction over the seed investor, a French citizen named Jean Canzoneri. The choose additionally famous that Canzoneri’s alleged funding predated the creation of Portofino and the alleged theft of commerce secrets and techniques.

Canzoneri argued that the case towards him must be dismissed as a result of Citadel Securities couldn’t accuse him of complicity within the theft of commerce secrets and techniques by investing in Portofino.

“Anybody who invests in a startup with data of the founders’ earlier jobs is aware of they’re stealing commerce secrets and techniques from their previous jobs,” Canzoneri says.

In Could 2023, Citadel Securities filed a lawsuit towards former staff Leonard Lancia and Alex Casimo. They have been accused of stealing commerce secrets and techniques and utilizing them to run their very own crypto-based market maker Portofino.

In response to the lawsuit, Portofino filed a movement to dismiss the case that very same 12 months, stating that the lawsuit was supposed to intimidate the 2 former staff and to discourage different present staff from doing the identical. However Portofino has remained steadfast in denying allegations of commerce secret theft by Citadel Securities.

“All Citadel Securities claims is that it has confidential ‘analysis’, ‘buying and selling methods’, ‘simulations’ and ‘enterprise plans and techniques’. So what? These amorphous classes cowl the whole lot of each HFT firm,” Portofino stated in a Bloomberg report.

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