A.R. Schmeidler & Co., Inc. v. Michael Kahn and UBS Financial Services, Inc.

653645/2012
October 18, 2012
State Court
New York
Supreme Court of the State of New York

On Thursday, October 18, 2012, investment firm A.R. Schmeidler & Co. Inc (“ARS”) brought suit against its former Senior Vice President Michael Kahn, as well as Kahn’s new employer UBS Financial Services, Inc. (“UBS”) (collectively “Defendants”). ARS alleged Defendants stole and unfairly utilized confidential and proprietary information related to ARS’ clientele. In addition to its common law claim for Misappropriation of Trade Secrets, ARS also brought causes of action for: Breach of Contract; Unfair Competition; Breach of Duty of Loyalty; Tortious Interference; and Conversion.

In its complaint, ARS alleged that after Kahn abruptly resigned from UBS, he “systematically contacted ARS’s clients” to discuss “their specific account and performance,” as well as “ different investment opportunities available at UBS.” His conduct – if true – could be in violation of a “Code of Ethics agreement” that Kahn had agreed to as part of his employment with ARS. The agreement requires Kahn to “maintain ARS’s confidential client information and not divulge such information to third parties” after termination. ARS asserts its client list is also a trade secret, as evidenced by the amount of resources ARS expended to compile the non-publicized list of “high net worth individuals in need of investment management and services.”

In addition to damages, ARS seeks both preliminary and permanent injunctive relief against Defendants. The proposed injunctions would enjoin Defendants them from using “ARS’s trade secrets or confidential client information, including client lists, client account values, performance, investments and holdings or by soliciting any of ARS’s clients that were procured by ARS . . . .”

TBD
A.R. Schmeidler & Co., Inc.
Michael Kahn, UBS Financial Services, Inc.
Common Law (Restatement)

Filings from this case

ARS Complaint | 2012-10-18