Citadel Securities sued a pair of former employees after they broke off to form a market-making firm for cryptocurrencies.
(Bloomberg) — Citadel Securities sued a pair of former employees after they broke off to form a market-making firm for cryptocurrencies.
The company claims Leonard Lancia and Alex Casimo started raising capital and building their high-frequency trading firm, Portofino Technologies, while still working at Citadel Securities with access to proprietary information, according to a complaint filed Wednesday. It is seeking a trial to determine the extent of monetary damages and potential restitution.
The pair “engaged in a brazen scheme to steal Citadel Securities’ trade secrets, lie to their Citadel Securities colleagues and raid the ranks of Citadel Securities’ employees,” the firm wrote in the complaint, filed in state court in New York.
Portofino denied the accusations and said it will fight the lawsuit.
“This claim is the latest step in a campaign by Citadel to seek to prevent Portofino from going about its legitimate business,” a company spokesperson said in an emailed statement. “It is unmeritorious, anticompetitive and a classic example of corporate bullying.”
Lancia and Casimo said in September that Portofino was backed by $50 million from venture capitalists. Lancia was Citadel Securities’ head of Europe systematic market making for derivatives, while Casimo was with the firm’s business-management team in Europe.
Read More: Ex-Citadel Securities Duo Unveils Crypto High-Speed Trading Firm
Citadel Securities, the high-frequency trading firm founded by billionaire Ken Griffin and run by Chief Executive Officer Peng Zhao, has roughly 1,600 employees in Chicago, New York and Miami. As a market maker, the firm uses technology and algorithms to execute trades in fractions of a second.
Portofino provides liquidity in crypto markets to financial institutions and high-net-worth individuals, trading on both centralized and decentralized exchanges and over the counter. It also gives advice and technical support for web3 startups seeking to list their assets on exchanges.
In an internal investigation, Citadel Securities found messages and a pitch deck from Portofino’s early fundraising efforts, months before the pair announced their intent to leave the firm, according to the complaint. In one exchange, Casimo offered a potential partner information related to “latency considerations for HFT trading,” the firm alleges in the suit.
Citadel Securities previously filed a non-compete complaint against another former employee who later joined Portofino, Vincent Prieur. That matter was settled out of court, according to a Citadel Securities representative, who declined to provide details of the settlement.
–With assistance from Greg Farrell.
(Updates with Portofino comment in fourth, fifth paragraphs.)
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