Ex-customer of Interactive Brokers insists he is entitled to comprehensive review of source code

Maria Nikolova

According to Robert Scott Batchelar, a protective order proposed by Interactive Brokers hampers his ability to hire experts willing to review and offer opinions regarding the source code.

FinanceFeeds has been monitoring a lawsuit targeting online trading major Interactive Brokers Group, Inc. (IEX:IBKR), with the plaintiff – a former client of Interactive, claiming he and a purported class of customers of Interactive Brokers LLC were harmed by alleged “flaws” in the computerized system used by the brokerage to close out (i.e., liquidate) positions in customer brokerage accounts that have margin deficiencies.

Over the last several months, the dispute has focused on access of the plaintiff to the defendants’ source code and related materials.

The plaintiff – Robert Scott Batchelar, has stated that he seeks access to the defendants’ Source Code so that his counsel and outside experts may have independent access to such materials for the purposes of this litigation. He is seeking discovery related to Interactive Brokers’ “Auto-Liquidation Software source code” and related explanations of its workings and explanations of related computer database inputs and outputs. The parties have made multiple good-faith efforts to eliminate the need for Court intervention but have failed to arrive at a mutually satisfactory resolution.

The brokerage, however, requested that the Court enter a supplemental protective order. According to the defendants, allowing the plaintiff to use the information his counsel and experts may learn from reviewing Interactive Brokers’ Source Code in other unrelated proceedings would defeat much of the purpose of entering into a supplemental protective order. The Source Code, Interactive Brokers argues, is highly proprietary and any public disclosure of it would severely impact the brokerage’s closely guarded trade secrets.

On July 2, 2019, Batchelar filed his Response to Defendants’ Motion for Entry of Supplemental Protective Order with the Connecticut District Court. In the document, seen by FinanceFeeds, the plaintiff argues against Interactive Brokers’ motion for a supplemental protective order,

According to the plaintiff, in an effort to hamper the necessary review of the Source Code, the brokerage has included language in its proposed Supplemental Protective Order that is not necessary to protect its confidential information, but, instead, is designed to hamper the plaintiff’s ability to hire experts willing to review and offer opinions regarding the Source Code. This, according to Batchelar, threatens to destroy the expert’s and the plaintiff’s counsel’s ability to work in future litigation involving the Source Code and against the defendants.

Further, according to Batchelar, the defendants have also proposed a disclosure and objection procedure that is unnecessarily time consuming and onerous, particularly in light of the very short, thirty-day, window in which the plaintiff’s experts must complete their review of the Source Code and prepare written opinions.

In particular, according to the plaintiff, Interactive’s proposal seeks to impermissibly:

  • (1) preclude Plaintiff’s ability to hire Source Code qualifiable experts;
  • (2) prejudge whether an expert could ever be Source Code qualified;
  • (3) prospectively prohibit—in all circumstances—Plaintiff’s counsel and Plaintiff’s Source Code qualified expert’s from future practice in litigation involving the Source Code against Defendants;
  • (4) prejudge, based on unknown future facts, whether Plaintiff’s non-Source Code qualified experts could ever rely upon the opinions or observations of Source Code qualified experts;
  • (5) prevent Plaintiff’s counsel from using their legal assistants and staff to assist with Defendants’ Source Code; and
  • (6) prejudge, again based on unknown future facts, whether documents and court proceedings should be closed to the public.

The plaintiff proposes that his version of a protective order is entered by the Court.

Read this next

Executive Moves

UAE broker Amana elevates Amr Masry to sales director

Amr Masry has been promoted to a new senior role at Amana Capital, becoming the group’s newest Sales Director, following a successful tenure with the UAE-based FX and CFDs broker.

Executive Moves

TopFX promotes Omar Al-Janabi to head of sales and business development

Prime brokerage firm TopFX has strengthened its Middle East operations with the promotion of Omar Al-Janabi, who is taking on an expanded role as global head of sales and business development.

Retail FX

Plus500 says 2022 revenue to be ‘significantly’ ahead of analysts’ estimates

Israeli-based, but London-stock market listed Plus500 said it expects annual revenue and earnings to be ahead of analysts’ estimates even as trading levels normalised from record volumes in the first quarter.

Digital Assets

Crypto derivatives giant BitMEX launches spot market

Crypto exchange BitMEX is looking to branch out of its singular focus on crypto derivatives with a suite of new product offerings. Although derivatives are to remain at the heart of BitMEX’s business, the popular platform will add spot crypto trading as it aims to aggressively grow their user base.


PrimeXM reports mixed trading volumes for April

PrimeXM has reported weaker trading volumes for April 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Digital Assets

DLT Finance approved by BaFin to support brokerage and custody of digital assets

DLT Finance is already partnered with big names within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.

Institutional FX

LUKB taps vestr to launch actively managed products, AMCs

The partnership with vestr goes to show the growing importance of digitising the active investment management space.

Digital Assets

Jewel taps Tokeny to launch stablecoin-as-a-service solution on Polygon

Jewel aims to offer a stablecoin-as-a-service solution to other digital asset and financial institutions B2B, allowing those businesses to provide cheaper, easier and near real time payments with stablecoins issued and redeemable directly at the bank level at Jewel.

Industry News

SEC charges $410+ million Ponzi scheme with pre-IPO shares

We allege that the defendants deceived investors about the pre-IPO shares they held, how much they were charging in fees, and who was controlling the business—all while paying themselves more than $75 million.