UBS has lost its bid to get a permanent injunction against three former quant traders accused of stealing proprietary algorithmic trading software with the intent of using it at their new employer, Jefferies.
Last March the Swiss bank filed suit against the head of its North American quant trading desk Jatin Suryawanshi and two of his colleagues Partha Sarkar and Sanjay Girdhar, who have since joined rival broker Jefferies alleging that they conspired to steal more that 250,000 lines of source code relating to its top secret algorithmic trading programs.
In response, the men commenced an arbitration before the Financial Industry Regulatory Authority (Finra). This meant the state court action was stayed and the question of whether a permanent injunction should be issued against them, prohibiting the use or disclosure of UBS source code, was placed before a Finra arbitration panel.
In late December, Finra's arbitration panel denied UBS's request for a permanent injunction. The bank has also since dropped damage claims against the three men.
Last week former Goldman Sachs computer programmer Sergey Aleynikov was indicted on charges related to the theft of propriety code connected to the investment bank's high-frequency trading platform.
Aleynikov left Goldman to join Teza Technologies, a Chicago-based start-up formed by ex-Citadel executive Mikhail Malyshev.
In October Teza CIO William Sterling told a Chicago judge in a case bought by Citadel that one of the firm's programmer developed code relating to data storage while still a UBS employee, but insisted the high-frequency trading start-up did not use it.