Pennsylvania Record

Monday, February 24, 2020

Philadelphia-based financial services firms alleges former employee misappropriated trade secrets

Federal Court

By Marian Johns | Oct 9, 2019

Philadelphia federal court

PHILADELPHIA — A Philadelphia-based financial services firm is suing a former employee and his current employer over a contract dispute involving a nearly $2.5 million promissory note and the alleged misappropriation of confidential information.

According to the Sept. 20 U.S. District Court for the Eastern District of Pennsylvania filing, plaintiff Janney Montgomery Scott LLC filed suit against defendants Laurence Braunstein, one of its former registered agents, and his employer Paradigm Wealth Management LLC. Janney alleges breach of contract, misappropriation of trade secrets, breach of the duty of loyalty and fiduciary duty, aiding and abetting breach of duty of loyalty and fiduciary duty and tortious interference with contracts. 

Braunstein began working for Janney in May 2015, according to the complaint. He allegedly worked under a qualified team agreement and Braunstein also had a $2.5 million promissory note with Janney for a loan the company gave him to help transition from his previous firm over to Janney.  

Despite filing for bankruptcy, the suit states Braunstein signed an updated agreement stating he would protect Janney's confidential information and remain with the company through 2024. 

In 2018, Braunstein left Janney without notice to join defendant Paradigm, the plaintiff alleges.

"Braunstein breached two separate contracts with Janney, which were intended to safeguard Janney's goodwill with its clients, its confidential information and its competitive interests, misappropriated Janney's trade secrets and confidential business information, and violated his duty of loyalty and fiduciary duty," Janney states in its lawsuit.

Among Janney's demands are to have the defendants enjoined from soliciting its clients and to return any documents, electronic files and other information. Janney also seeks actual, compensatory and punitive damages and litigation costs. 

Janney is represented by Suzanne Decker, Kristen Eriksson, Dana Gloor and Megan Burnett of Miles & Stockbridge PC in Baltimore.

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