Liquidnet allegedly stole trade secrets, says lawsuit

25 October 2011

Liquidnet is being sued by Wedbush Securities for the alleged theft of trade secrets related to its new private shares trading group.

According to the lawsuit, Louis Kerner and Michael Silverstein, former employees at Wedbush, stole trade secrets from their previous employer to inform the development of the new platform at Liquidnet.

Liquidnet’s Private Shares Group will enable the trading of stocks and shares in private and pre-IPO companies such as Facebook and Twitter.

The lawsuit claims that Mr Kerner and Mr Silverstein took company information from Wedbush, such as lists of customers and account information, and emailed the details to personal email accounts.

In the complaint, which the Wall Street Journal reported, Wedbush said: “Werner, Silverstein and Liquidnet engaged, and continue to engage, in the premeditated taking and misappropriation of certain of Wedbush's most valuable trade secret and confidential and proprietary information.”

Liquidnet, which is yet to comment, is thought to be reviewing the details of the legal action.

Louis Kerner worked as vice-president of Equity Research for the social media and e-commerce sectors while at Wedbush Securities.

By Jim Ottewill

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