(Updates with excerpt from filing in fourth paragraph.)
Oct. 25 (Bloomberg) -- A lawsuit in which Wedbush Securities Inc. accused two former employees and Liquidnet Holdings Inc. of taking customer lists and documents should be dismissed or stayed, Liquidnet said in court papers.
In the suit, filed Oct. 20 in New York State Supreme Court, Wedbush accused New York-based Liquidnet and ex-employees Louis Kerner and Michael Silverstein of working together to take proprietary information from Los Angeles-based Wedbush to start a competing business at Liquidnet.
Wedbush’s complaint should be dismissed or delayed because the company failed to file a corresponding demand with the Financial Industry Regulatory Authority, required in disputes between registered members, Liquidnet said yesterday in a court filing.
“Wedbush cannot establish a likelihood of success on any of its claims because, inter alia, none of the information claimed to be proprietary to Wedbush constitutes trade secret information, the information is available from public sources and because Kerner and Silverstein are not barred from competing with Wedbush through any agreement,” Liquidnet said.
Liquidnet asked the court to deny Wedbush’s motion for a temporary restraining order, a preliminary injunction and expedited fact-gathering.
Liquidnet said on Oct. 17 that it hired Kerner to run a new group focused on private companies and that he would be joined by Silverstein.
Kerner began working for Wedbush in its New York office in April 2010 and was managing director of its Private Shares Group since March, Wedbush said. Silverstein began working in the Los Angeles office in February and reported to Kerner and others since April, it said.
Wedbush is seeking unspecified damages and court orders barring the defendants from using, disclosing or transmitting any records or information related to its business.
The case is Wedbush Securities Inc. v. Liquidnet Inc., 652875/2011, New York State Supreme Court (Manhattan).
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