Interactive Brokers voices concerns about access to source code materials
The brokerage says that confidential discovery produced in a lawsuit brought by ex-customer Robert Batchelar may be used for purposes other than the prosecution of this litigation.
Concerns of online trading major Interactive Brokers Group, Inc. (IEX:IBKR) that confidential materials related to its source code may be subject to unauthorized use are growing, as indicated by the latest documents filed with the Connecticut District Court.
Interactive Brokers LLC, Interactive Brokers Group, Inc., and Thomas A. Frank are targeted in a lawsuit brought by a former client of the brokerage – Robert Scott Batchelar. He and a purported class of customers of Interactive Brokers LLC claim they 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.
Whereas Batchelar argues that he is entitled to a comprehensive review of the source code materials, the defendants insist that a Supplemental Protective Order has to be issued by the Court.
On Tuesday, July 16, 2019, the defendants in this action filed a reply memorandum of law in further support of their Motion for Entry of a Supplemental Protective Order Governing Plaintiff Robert Scott Batchelar’s Access to Defendants’ Source Code and Related Materials.
The parties in this case dispute whether Plaintiff’s counsel should be permitted to use the information obtained from review herein of Defendants’ Source Code, including testimony provided by a Source Code Qualified Person, in a separate matter, proceeding, action, investigation or arbitration involving any of the Defendants and a claimant other than Plaintiff. Put bluntly, Interactive Brokers would like to make sure that whatever information regarding its trading systems is revealed, it stays within this particular lawsuit and cannot be used in another lawsuit.
The brokerage argues that its proposal is based on a real concern. The defendants say that throughout this litigation, they expressed their concern that confidential discovery produced herein may be used for purposes other than the prosecution of this litigation and that Plaintiff’s counsel would be consulting with attorneys who have not appeared as counsel of record in this case regarding this litigation.
That concern has proven to be well-founded, Interactive Brokers says. On July 9, 2019, the defendants became aware that in a confidential arbitration involving Interactive Brokers LLC and customers other than Batchelar, counsel for the customers sought all discovery produced in this action.
This is particularly disturbing, Interactive Brokers argues, and reiterates its motion for a supplemental protective order.
The lawsuit continues at the Connecticut District Court.