Legal wrangle highlights need for cybersecurity

Legal wrangle highlights need for cybersecurity

Legal wrangle highlights need for cybersecurity Confidential information allegedly used by one investment firm to outmaneuver another sends a clear message that advisors need to do more when it comes to privacy. 

Catalyst Capital Group and West Face Capital are two Toronto-based investment firms. They’re also locked in a bitter battle to win some of the AWS-3 spectrum up for auction by the federal government. Sealed bids are due March 3.

Catalyst is backing Mobilicity, who’ve been under creditor protection since September 2013. They hold about 30 percent of its senior debt. West Face acquired Wind Mobile in September 2014 in partnership with Globalive Capital (CEO of both Globalive and Wind Mobile) and several other investment firms.

The problem?

The two firms are in court as a result of a low-level research analyst jumping ship last May from Catalyst to West Face. Normally, this wouldn’t be a problem, except in this situation Catalyst claims that the analyst provided confidential information during the interview process that enabled West Face to acquire Wind Mobile after Catalyst called off negotiations.

A lawyer for West Face is quoted in the Globe & Mail report about the court proceedings: “Catalyst Capital’s unsubstantiated allegations about West Face are without merit and their claim is being pursued to damage West Face, and not for any proper purpose. West Face intends to defend the claim vigorously.”

Ultimately, Catalyst’s push to have the West Face computers searched for confidential information might not come in time. The Globe reports the motion won’t be heard until March 19, more than two weeks after the sealed bids are due.  

The lesson?

Those working in the financial services industry, whether you’re an investment advisor or bank CEO, must ensure that you’re doing everything possible to protect the confidential information of your clients and that of your firm.

Privacy is critical to trust. And it all begins with an appropriate amount of cybersecurity.