Citadel Securities sues former employee for leaving for crypto venture – Ledger Insights
Incumbents across capital markets and banks are struggling to stem employee departures to cryptocurrency firms. Last week, market maker Citadel Securities (Citadel) applied for a restraining order against Vincent Prieur, a former employee who joined the Swiss startup Portofino.
The new company was founded by former Citadel Securities personnel Leonard Lancia and Alex Casimo. Two weeks ago, it announced $50 million in funding from Valar Ventures, Global Founders Capital and Coatue. While Casimo and Lancia left Citadel Securities in March 2021, Prieur left a year later.
In court documents, Citadel Securities described Portofino as “a key competitor that was deceptively and covertly formed by other former Citadel Securities executives.”
Prieur’s departure in March this year is said to have occurred four days after Citadel Securities’ first systematic crypto trade, which was conducted in Asia. However, Prieur resigned in January and was asked to stay on to train his replacement. Citadel claims Prieur is a key member of the team that developed its crypto strategy, citing an annual performance review in which Prieur said his best achievement was “leading CitSec’s foray into crypto”.
In his opposition response, Prieur’s legal team claims that he “had no responsibility whatsoever for any cryptocurrency-related matters.” He claims that his role in cryptocurrency was to “review publicly available information, published openly by public exchanges, regarding the procedural mechanisms for registration to trade cryptocurrencies on those exchanges. Prieur did not (for example) consider or present any strategies for how Citadel should trade cryptocurrencies, or what clients or methods should be considered, or anything like that.”
In addition, Prieur claims his non-compete covers relying on confidential information or working in a capacity similar to his at Citadel. He claims that the so-called confidential information relates to registering as a crypto exchange, which was specific to Citadel and which Portofino has already done and had already traded billions before he joined. He notes that Citadel Securities is a market maker in fixed income and equities, while Portofino is a market maker in cryptocurrencies.
Prieur’s legal team requested the production of a powerpoint purported to be his crypto-related work product, but Citadel refused to do so. Prieur’s side claims this is because “the facts show that Prieur did not create or possess any proprietary information that could possibly justify an injunction against him.”
They state that in the summer of 2021, Citadel Securities moved its cryptocurrency initiative out of the US to Asia, “where an entirely new and separately designated team in Asia led (and continues to lead) Citadel’s efforts to explore and pursue any cryptocurrency. business departments from that point on and forward. Prieur did not move to Asia to remain part of that team, and his involvement (such as it was) in Citadel’s ‘crypto operations’ was then effectively reduced to 0% of his work time.”
The hearing is set for tomorrow.
Meanwhile, earlier this month, Citadel Securities was revealed as one of the backers of a new digital asset exchange EDX Markets, along with Charles Schwab, Fidelity Digital Assets, Virtu Financial and others.
Our own experience is that Citadel Securities can be very aggressive. After a non-controversial post about the launch of EDX Markets, Ledger Insights was contacted on several occasions by two separate companies acting on behalf of Citadel Securities. We made a small change, but declined to remove a reference to Citadel Securities who started the consortium, as we believe this is factually accurate. The companies did not claim that it was inaccurate, but still continued to push for the change, which in our view was inappropriate.
Related documents:
Citadel Securities Request for Restraining Order and Prior Release of Cook County
Prieur answer
Arbitration against Alex Casimo
