Quad Capital Accuses Ex-COO Of Plotting Against It

[dealmaker]

No wonder they were not responding to queries...




Quad Capital Accuses Ex-COO Of Plotting Against It

Oct 18 2013 | 11:16am ET


Quad Capital has sued its chief operating officer of nine days, accusing him of using the position to collect sensitive information before quickly moving on to another hedge fund.

Quad said Gregg Grimmelbein abruptly resigned on Oct. 3, taking confidential information about the firm to Tiger Ratan Capital. Among the information he allegedly collected were nonpublic financial statements, an investor pitchbook and a summary of its traders' performance.

According to Quad, Grimmelbein might use the latter to "lure star traders from Quad Capital to his new employer."

Quad alleges that Grimmelbein never intended to remain at the firm and was actively seeking a post at Tiger Ratan before taking the job. During his nine business days at the firm, he was rarely seen working and "kept to himself and mostly stayed in his office."

"When he did engage with other employees, he appeared to be fishing for information that, in hindsight, would prove valuable to his new firm after his resignation," Quad alleged. It added that Grimmelbein always "had one foot out the door," refused to sign standard employment forms and "exhibited other suspicious behavior."

 

[EvOTraderV2]

LOL. You would think that a hedge fund would make someone sign all the non-disclosure and non-competes before the guy walks in and steals all the information. Was this dude brought in from some other company? If so, hat is on Quad for not knowing the person's background. Unfortunately, that's what happens with pedigree takes precedence over common sense.

 

[dealmaker]

Quote from EvOTraderV2:

LOL. You would think that a hedge fund would make someone sign all the non-disclosure and non-competes before the guy walks in and steals all the information. Was this dude brought in from some other company? If so, hat is on Quad for not knowing the person's background. Unfortunately, that's what happens with pedigree takes precedence over common sense.

Apparently they are not the only one....



Citadel Sues, Fires Engineer Over Data Transfers

Aug 30 2011 | 2:21pm ET


Citadel Investment Group has sued an employee for allegedly stealing the hedge fund's proprietary information as he prepared to join its bête noir.

According to Citadel, Yihao Ben Pu, an engineer at the firm, downloaded "massive amounts of highly confidential" data onto "at least two personal external devices." Worse still, Citadel said, Pu, who was to be fired today, was in talks with Teza Technologies, a firm with which Citadel has had run-ins.

Teza was founded by the former head of Citadel's high-frequency trading group; two years ago, Citadel sued the firm and founder Mikhail Malyshev for stealing its proprietary systems and violating his non-compete agreement. Malyshev has since been indicted for perjury for statements stemming from that case.

Pu, who joined Citadel only last year, and Teza deny that he was being recruited. The 23-year-old engineer said he had never spoken with Malyshev and that he did not intend to leave Citadel; the phone calls between him and Teza cited by Citadel were made as he sought a lawyer—a move Citadel advised him to take.

"Teza was not recruiting Mr. Pu and has no involvement in the wrongdoing alleged in the complaint," Chris Gair, a lawyer for Teza and Malyshev, told Crain's Chicago Business. "Citadel's identifying Teza in its complaint is part of its continuing campaign to smear a competitor."

Citadel said it is continuing its probe into Pu's activities, but alleged that Pu installed security bypass programs to allow him to transfer the data and that he had "repeatedly lied" to the firm.

Pu told Crain's that Citadel has "overreacted."



ps Quad is more of a Prop Firm than a Hedge Fund despite their name, they require traders to have S7 or S56 license; you can't find traders carrying such licenses in Greenlight, SAC, Passport, Highbridge, Paulson etc..