Firm Wins Seventh Circuit Appeal on Regulation S-P
July 2016 – The firm prevailed before the US Court of Appeals for the Seventh Circuit, on behalf of two clients, a registered investment adviser and a cloud-based data storage provider. The clients were sued by an individual formerly associated with the investment adviser who was allowed to use the data storage services through his relationship with the investment adviser. After the relationship terminated the investment advisor blocked the individual’s access to the data storage software. The individual sued, claiming violations of the Illinois Trade Secrets Act, conversion, unjust enrichment, among other claims. The firm secured partial summary judgment on behalf of its clients and then prevailed in a jury trial on the remaining portion of the case.
The plaintiff appealed to the Seventh Circuit Court of Appeals, claiming he had a right to the data that was stored in the database. The Seventh Circuit agreed with the firm that Securities and Exchange Commision Regulation S-P, promulgated pursuant to the Gramm-Leach-Bliley Act, prohibited the firm’s clients from allowing the plaintiff any access to the data. It also agreed with the firm that the plaintiff’s claim for conversion was defective because the plaintiff did not properly make a demand for the information in the database. Jim Kopecky and Howard Rosenburg lead the trial team. Howard Rosenburg argued the appeal.