UBS loses trade secrets theft case

The US Financial Industry Regulatory Authority (FINRA) has ruled against UBS in its allegations that three of its former employees stole an algorithmic trading code used by the bank.

The arbitration case found in favour of the three employees – Jatin Suryawanshi, Partha Sarkar, and Sanjay Girdhar. According to the UBS complaint, they were accused of misappropriating trade secrets, breach of contract, breach of fiduciary duty, unfair competition and “other wrongdoing” while they were employed by UBS Securities.

They were accused of obtaining proprietary company information – in this case the source code for UBS’s algorithmic trading programmes. They were then planning to give the source code to their new employees at investment bank Jefferies & Co, according to the report which appeared in Securities Industry News.

Reports said that Sarkar had allegedly copied 25,000 lines of computer source code from UBS computers. This was roughly equal to the length of one algorithm, or parts of several. He then allegedly emailed this code to this personal email account. Suryawanshi was also accused of attempting to hide his colleague’s theft by deleting the records from a UBS computer.

The three were also accused of starting their new jobs at Jefferies & Co while still employed at UBS. Suryawanshi was accused of a breach of fiduciary duties by poaching the other two programmers to work for other investment bank. The three former UBS employees had denied the charges.

Citing an unnamed source, the report said that the ruling ends the dispute, with neither party seeking further action. All requests for injunctions or damages were rejected, and the arbitration fees will be split between UBS and the three former employees.

Of the three member arbitration panel, one member dissented the final decision but no further explanation was given, the report said.

“We are absolutely delighted to have this put behind them so that they, and Jefferies, can go forward,” said lawyer Lance Gotko, who represented the former UBS programmers.

FINRA said it does not comment on the results of its arbitration cases. UBS has also declined to comment.