During final arguments in the preliminary injunction portion of Citadel's civil lawsuit against Teza, lawyers for the giant hedge fund firm said the defendants, former Citadel executives Mikhail Malyshev and Jace Kohlmeier, had violated their promise not to compete against Citadel or solicit its employees when they "surreptitiously" set up the new company less than six weeks after leaving Citadel.
Friday's arguments drew Kenneth Griffin, Citadel's founder and head, into the packed courtroom, where company lawyers claimed the proceedings were being monitored by the "entire financial community" to see whether non-compete agreements the two men allegedly violated still had any meaning.
The case has also garnered attention because of the small window it has opened on the secretive, lucrative and fast-growing world of high-frequency trading.
Citadel's lawyers claim that Teza is a competitive enterprise that has been recruiting talent, building databases of historical and real-time market, constructing a super-fast trading engine and developing trading signals and strategies in an effort to be able to engage in high-frequency, low-latency trading.
Such trading, theoretically, would allow it to predict the price of a financial instrument one second in the future and profit from that.
Teza made headlines this summer when one of its hires, a former Goldman Sachs Group Inc. computer programmer named Sergey Aleynikov, was arrested and charged with stealing secrets from the investment bank. Aleynikov denied the charges, but Teza fired him.
Citadel subsequently filed a lawsuit against Teza, claiming that Malyshev and Kohlmeier had violated their non-compete clauses by starting the new company.
In earlier testimony in the case, the court heard that two other Teza employees had loaded code onto the start-up's computers that may have belonged to their previous employers.
No comments:
Post a Comment