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.

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