U.K. High Court of Justice Rules on Request by Hedge Fund Manager Affiliates to Search Computers of Two Former Employees

Most hedge fund management companies are built on a foundation of confidential and proprietary information – strategies, technologies, positions, plans, investor and prospect lists, etc.  To add value, employees must be given access to some or all of that confidential information, which of course invites the prospect that employees will walk away with it.  Managers take various steps to prevent theft of confidential information, including legal and technology precautions.  See “Protecting Hedge Fund Trade Secrets: What a Difference a Year Makes,” Hedge Fund Law Report, Vol. 5, No. 16 (Apr. 19, 2012).  However, confidential information can be hard to secure absolutely and difficult to monitor.  Thus, with some frequency, litigation over ownership of and access to confidential information follows the voluntary or involuntary departure of employees from hedge fund managers.  See “Eight Measures That Hedge Fund Managers Can Take to Mitigate the Risk of Theft of Their Trade Secrets,” Hedge Fund Law Report, Vol. 5, No. 21 (May 24, 2012).  This article discusses a recent example of such litigation.

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