A BGC Partners Broker Knew How Much Money the Desks Made. Then He Leaked It
(Bloomberg) -- Forgetting to turn off a junior employee’s access to a secret spreadsheet has come back to haunt BGC Partners Inc.
Before starting as a broker, Robert Goan was employed in BGC’s back office in the U.K., working on the firm’s internal database. In that post, he could read reams of information, including the sales figures from individual brokers and their desks.
He retained access when he moved to the front office, allowing him to share pages of private data with a colleague. It was then passed to rival Tradition U.K. Ltd., the London arm of Cie Financiere Tradition SA, forming part of the latest spat between the city’s inter-dealer brokerages that has ended up in a U.K. court.
BGC has brought a number of claims against Tradition in a lawsuit railing against the brokerage’s "newly-aggressive approach" to competition. BGC said its competitor accessed private data and, separately, poached a team of six brokers on a currency-trading desk in April 2017. Tradition called the entire lawsuit misconceived, saying that the shared data is largely irrelevant and anyone would have wanted to recruit “star brokers.”
According to the lawsuit, the dispute goes back to the failure to turn off Goan’s access to the confidential broker sales data in February 2016. At one point, he shared data on revenue generated by 143 desks at BGC with his colleague Simon Cuddihy, according to documents BGC filed with the court.
“I just look at it from the other inbox in case they realize this and take me off it,” Goan told Cuddihy in a message from October 2016, the papers say.
Cuddihy on multiple occasions shared the confidential data with a close friend and former colleague, Anthony Vowell, who worked at Tradition, according to BGC’s complaint. The court documents said that at one point Vowell “applied significant pressure” on Cuddihy to send him revenue figures. Goan, who no longer works at BGC, and Cuddihy have since privately settled their own cases with BGC.
Vowell denies applying significant pressure to Cuddihy to provide the information, saying Cuddihy "offered to provide the information and voluntarily did so." BGC hasn’t identified any loss suffered as a result of Vowell receiving the information, Tradition said in its court filings.
“We are entirely confident in our position and look forward to the resolution of this dispute. It would not be appropriate to comment further while proceedings are active,” lawyers acting for Tradition and Vowell said in a statement. Cuddihy’s lawyer didn’t return calls and emails seeking comment. Goan and a BGC spokesman declined to comment.
The fact that Vowell received the data “whilst regrettable, is simply the result of foolish conversations in the pub between two friends who ought to have known better,” Neil Kitchener, a lawyer for Tradition, said in court. "Those documents really aren’t very sensitive and really aren’t very valuable."
BGC said Cuddihy boasted to people at a party that he had access to all of BGC’s revenue numbers. Cuddihy provided specific information to Vowell when he requested it, BGC said in its filings.
In one WhatsApp message, Cuddihy said: "Obv don’t tell ppl...cos they would sack me...If got back." The internal records went beyond that which was of any obvious professional use to Vowell, BGC said.
BGC sued because it’s “upset at Tradition’s recent adoption of what BGC describe as a more aggressive” approach to recruitment, Kitchener said in court. There’s no evidence of a campaign "to obtain and misuse BGC’s confidential information," he said.
BGC alleges that the data acquisition wasn’t Tradition’s only aggressive move.
The broker says that in a separate incident, Tradition orchestrated the hiring of six of eight brokers on its Forward Cable Desk, which was co-headed by Paul Bell. All the brokers resigned April 3, 2017, the day their boss, Rob Kitchin returned from holiday. Bell, who according to BGC acted as a "recruiting sergeant," was paid 1 million pounds ($1.31 million) by Tradition.
Tradition said that BGC was unwilling to match any of the offers it made to the brokers and that Bell played no role in recruiting his team. Tradition negotiated individually and offered "multiples of what [they were] receiving by way of annual remuneration."
The loss that the BGC unit suffered from the departure of its entire team -- the two remaining employees on the desk were about to retire or go on long-term leave -- came to $16.3 million, according to the court documents. Bell didn’t comment when contacted by Bloomberg.
“The employees chose to join an employer whom they liked and who valued them highly,” Tradition said.
Lawyers for Paul Bell said in court filings that there was "considerable dissent and dissatisfaction" among BGC’s workforce after it acquired the unit in 2014 "because of the way BGC operated and managed the business."
BGC aims "to disrupt lawful and legitimate competition and to punish Mr. Bell for deciding to take up employment with a competitor," they said.
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