There's another, more practical question. Does the canary-wielding party have the resources to fight the matter to conclusion.
If there's no known caselaw, you're going to have to litigate with the US government over this issue. That's an uphill battle that is exhausting, outrageously expensive and fraught with risks to both the company and the principals.
And guess what? Lets say you win this epic battle after spending lots of money and many months of your time. Everything that you've done was done in a secret court and will be unknown to the world. Your attorneys get a big check, and you get a pyrrhic victory that you cannot tell anyone about.
This scenario is unlikely to be an _easy_ win in court, but presents enough headache and just the risk of the company losing in court would most likely result in a settlement offer.
The situation might seem "extremely straightforward" to you, but it is an expensive and time-consuming kind of legal dispute, because it requires discovery of years of business records, expert witnesses in forensic accounting, and likely a trial to establish whose interpretation of key contract terms is the controlling one. That means years and at least hundreds of thousands of dollars in legal work, at the end of which a trial is hardly a sure outcome. Unless the plaintiff is willing to commit to funding that out of pocket, then he'd have to find a lawyer willing to take it on contingency, meaning he'd pay as much as half of any award at trial, after legal costs were deducted. Unlikely the best-case outcome is much, and the worst-case outcome could bankrupt an individual.
"maybe he did win in court and they simply ignored the court order" No, that doesn't happen in countries with solid legal systems, if it's a corporate defendant with easily identifiable assets.
Doesn't matter - it'd still be "trivial" to put together a sufficiently complicated case to have it survive dismissal attempts and drag it out for years.
The point is they're not just at risk of losing an anti-trust battle, but simply of having their execs embroiled in it for years.
And here's the sad truth. You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win.
Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win....
(Note: discovery can be very expensive, and depositions tend to take a lot of time in preparation and the actual deposition.)
Which suggests the defendant isn't entirely insane to try to win this in the court of public opinion, a worst case apparently not imagined heretofore.
I'm a partner at a global law firm. We handle these pretty routinely for both publicly traded and private companies alike. There are some funky theories in this thread. Happy to help if you want to get in touch.
My take: it's almost certainly not a battle worth fighting. If it is worth fighting, hire an attorney. If it isn't, devote energy elsewhere and consider it a lesson learned.
I'd give the same advice if it was a local restaurant rather than a mega-corp.
I don't think the issue is that the courts don't have the power, it's that it would take forever to come to a conclusion in the court given the resources each side can pour into the fight, how complicated the legal details are, and how poor the legal system is at deciding these kinds of massive corporate legal issues (according to one of the podcast hosts).
Since it would take forever, it's much more likely the two sides settle or give up before they run out of legal tricks.
No individual will ever pursue this in court because of the cost in time and money and the risk of being declared liable anyway. Corporations with legal departments are certainly capable of pursuing this against individuals.
Nothing. But to win they would have to show that the company really was responsible for it, since the accused is innocent until proven guilty. The accused can also request a trial by jury; 12 people generally make the right decision.
(Note: not legal advice, and possibly only relevant to the US)
I agree we don't know the whole story. But this is the version of the story that puts the OP in the best light, and still, my overall impression is it just seems like it's not worth it.
What's the best case scenario they could get out of it? Maybe 6% equity, or maybe a $10k severance. But going after a company with no revenue and only $40k in the bank doesn't really seem like the best use of anyone's time, energy or money.
There's minimal available short-term value, and litigation/fighting will sharply blunt any potential long-term value.
Dunno about the rest of the world, but I don't think US courts, at least on the federal level, will accept a lawsuit between two companies under the same controlling ownership. IIRC, it violates the Supreme Court's interpretation of the Constitution's "case or controversy" clause.
No one should independently contact a company about this type of issue without first obtaining competent legal advice. And I do mean competent advice; most lawyers are very technically illiterate and will not be sympathetic, let alone familiar with the relevant areas of law.
The researcher is lucky that TradeKing believed their NDA trick was sufficient. Even if the case here is weak, and I wouldn't necessarily assume it is, it would still seriously damage the researcher's life.
Here's how it goes when you get sued by a big company. Their lawyers essentially have a heyday doing everything possible to obstruct and delay the process so that they can maximize their time on the corporate teat. It will go on for years; they won't mind because it's business as usual for them, and they're getting paid big bucks to torment you. Your life will be ruined: assets seized pre-emptively, reputation and credit destroyed, inordinate quantities of time consumed by legal research and tedious paperwork, struggling (if not immediately blatantly failing) to keep your incompetent counsel paid at $250/hr and meet the retainer, and eventually failing to file some document or pay some fee that will cause the court to enter a default judgment against you and permanently confiscate everything you own, leaving you with the albatross of a massive outstanding judgment waiting to be enforced, bank accounts garnished any time you get any money, etc. And that's the short version!
And then guess what -- if, by some miracle, you don't lose in the first round, this whole process will repeat as they file appeal after appeal. Hunker down because the proceedings will last at least 5 years.
The corporate lawyers will be able to justify all of it to their clients without blinking an eye, who probably forgot that they even asked them to sue you. Everyone at the company and the law firm will go home and sleep soundly on their piles of money, and you'll have learnt your lesson that trying to stop the subterfuge of an online trading platform is a terrible offense.
If there's no known caselaw, you're going to have to litigate with the US government over this issue. That's an uphill battle that is exhausting, outrageously expensive and fraught with risks to both the company and the principals.
And guess what? Lets say you win this epic battle after spending lots of money and many months of your time. Everything that you've done was done in a secret court and will be unknown to the world. Your attorneys get a big check, and you get a pyrrhic victory that you cannot tell anyone about.
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