Wedbush Securities sues Liquidnet over trade secrets

Wedbush Securities sues Liquidnet over trade secrets

Wedbush Securities is suing two former employees and dark pool operator Liquidnet for allegedly stealing trade secrets related to a new private shares trading business.

Earlier this week Liquidnet revealed that it has hired Wedbush's Lou Kerner - "the foremost Wall Street social media and private company analyst" - to lead a new private-company shares trading unit. Another Wedbush employee, Michael Silverstein, joined him in the move.

In a suit filed in the New York State Supreme Court in Manhattan, Wedbush says the defendants have taken propriety information, including customer lists, documents and disclosures, to help set up the new venture.

The defendants engaged in the "systemic and surreptitious raiding of some of Wedbush's most valuable assets" says the complaint. This was "with the goal of 'starting' the same business they took from Wedbush at Liquidnet," and causes Wedbush "direct, immediate and irreparable harm."

Wedbush is seeking unspecified damages and to stop Liquidnet from using the customer data to compete with it.

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