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For this case, a major national stock trading venue sued a
global financial exchange operator alleging that former employees
misappropriated trade secrets in their transition to employment at
the plaintiff’s corporation. Let’s look at how WIT was able
to meet the expert need and assess the future legal landscape of
the industry.
The Case: A Trade Secrets and Patent Infringement Suit Spurs
Countersuit Alleging Antitrust Violations
The defendant, a major national stock trading venue, sued a
global financial exchange operator alleging that former employees
misappropriated trade secrets in their transition to employment at
the plaintiff’s corporation. The defendant claims that prior to
departure from the firm, former employees forwarded technical
documents that contained proprietary trade secret information which
was then used to form trading platforms operating in the
plaintiff’s ecosystem.
The Ask: A Testifying Expert That Understands the Development
and Operations of Financial Trading Platforms
The defendant approached WIT to provide an expert who possessed
extensive, hands-on experience with trading platforms and specific
knowledge related to floor trading. Additionally, they sought
someone who has been previously involved with the development of
software for electronic markets both old and new, and understood
the patents associated with financial exchanges.
Why WIT Was Best Suited to Meet the Expert
Need:
In anticipation of an influx of disputes regarding financial
trading platforms, WIT has actively recruited and retained
world-class academics, industry executives, and subject-matter
experts to support clients involved in future fintech litigation.
For this case, WIT was able to recommend a professional with more
than 30 years of experience in the financial services industry as a
Chief Technology Officer at multiple major financial firms.
Further, this expert has been responsible for financial technology
design and development throughout most of his career and
specializes in patents and trade secrets litigation. In addition,
we were able to recommend a second expert with nearly 40 years of
experience in the financial industry with a focus on financial
trading, mathematics, and software development. This expert also
has firsthand experience working with Congress, the SEC, and the
DOJ on a variety of disputes regarding the United States financial
system and trading platforms.
The Legal Landscape: Trading Platform Prosecution and Crypto
Litigation on the Rise
This decade has already shaped up to be one of the most
tumultuous yet for financial trading platforms, and with regulators
pushing for more extensive guidelines for fintech firms, it may
also end up being one of the industry’s most transformative
periods. After the pandemic rocked the economy, cryptocurrency
purveyors plummeted in value, and virtual assets became volatile,
regulators have moved fast to prosecute exchanges and executives
potentially engaging in fraud and deceptive trading practices.
Intellectual property infringement in the trading platform space
has seen a spike in recent years, with major players like Fidelity, Morgan Stanley, Ameritrade, and more
finding themselves involved in high-profile battles to protect the
valuable IP that drives their trading systems. Further, crypto platform Coinbase has also been sued for
patent infringement after Veristaseum Capital claimed that the
exchange’s trading services, specifically their methods for
processing digital currency transactions, directly infringed on
Veritaseum’s proprietary services.
While the cryptocurrency and digital asset space is not wholly
governed by the United States securities laws as they stand
today, regulatory bodies are pushing for that to change. Since the
start of last year, the SEC has brought more than 130 crypto lawsuits and settlements to the
courts against major companies like Ripple and Bittrex as they
attempt to get a handle on crypto regulation. They also moved to
prosecute some of the industry’s largest financial exchanges,
suing the world’s largest crypto trading platforms (Coinbase and Binance), leading experts to
believe that this is just the beginning of the agency’s journey
in regulating crypto’s wild west.
Consumers are also fighting back against fraudulent exchanges;
23 class action suits were brought against
crypto exchanges or trading platforms in 2022, which is twice as
many cases filed in any previous year. And with the total value
destroyed in the current crypto crash passing $2 trillion, it would be
remiss to assume that this influx of crypto litigation will slow
anytime soon.
How Experts Can Assist in Financial Trading Platform Cases
and Crypto Litigation
As the fintech industry becomes more volatile, engaging with
experienced testifying experts will help those in the industry
prepare for potential litigation risk as the space evolves. By
collaborating with experts now, industry players can stay ahead of
the curve when it comes to regulatory action and guidance related
to digital asset trading practices. Further, industry professionals
can offer insights into the software and hardware that power these
platforms and help patent holders protect their industry-specific
IP.
AT WIT, we understand that the future of trading platforms and
crypto litigation is poised to be complex. In order to provide
those in the space with the best possible insights for their case,
we affiliate with industry insiders who are uniquely positioned to
assist counsel and their clients in active crypto lawsuits and
trading platform conflicts. These leading experts understand the
industry and have years of experience in assessing and avoiding the
potential liabilities that might arise as the legal landscape in
the trading platform space continues to evolve. Our diverse teams
of experts feature top academics, industry veterans, and technical
subject matter experts in virtual assets, trading platforms, and
industry standards and policies.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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