An insurance company is alleging theft of trade secrets in New York City by a former administrator.New York City business attorneys know that this kind of violation is addressed in 18 USC 1832. There, trade secrets are defined as any type of information or product (there’s a long list that includes financial, business, scientific and more) in which the owner has taken some reasonable measures to keep the information a secret and that the information has some economic value – whether actual or potential – that is derived from it being a secret.
The actual theft of a trade secret is when a person steals that information or product (either outright or through some form of deception or fraud) when they don’t have the right or permission. People can still be prosecuted under this law even if they aren’t directly responsible, but if they conspire to do this with others or if they purchase or receive the trade secrets.
Trade secrets are important for New York City businesses to thrive. For example, if you have a sauce company, the recipe you use is considered a trade secret – if everyone knew it, it would no longer hold its value because anyone could reproduce it.
The same general concept applies in this case, in which New York City-based insurance company American International Group Inc. has filed a civil lawsuit against the man who used to run the aircraft leasing arm of its company. The man in question is now a billionaire in Los Angeles. AIG officials say the former administrator stole company secrets, lured customers away and started taking away AIG’s business deals when he left in 2010 to work for a competing firm, Air Lease Corp., of which the 66-year-old is the owner.
AIG says that their former employee used flash drives – 16 of them – to download some 13,000 of AIG’s files, including price information, previous contracts, statements of work and letters of intent. They allege that AIG likely lost several million dollars as a result of his actions, and the company is seeking to recover it through this New York City business litigation.
A spokeswoman for the Los Angeles billionaire says the claims are baseless.
The man became rich after co-founding a company called International Lease Finance Corp., also known as ILFC. In 1990, he sold that company to AIG for $1.3 billion. He stayed on with the company after that to help run operations.
But that business relationship took a bad turn when AIG accepted a federal bailout back in 2008. That bailout meant the government would have oversight of the company and its subsidiaries – including ILFC. He tried on multiple occasions to buy ILFC back from AIG, but when that didn’t pan out, he left and founded Air Lease. To do so, he used contacts he had culled in the four decades he had been in the aircraft leasing industry.
Because of his regard within the industry, he was able to take customers with him, as well as some of the top executives who had headed ILFC. The lawsuit alleges those top executives worked in concert with the billionaire – in fact, at his direction – to take information from AIG while they still worked there.
It’s unfortunate when business relationships don’t work out. But when it happens, it’s important to ensure that your financial and business interests are protected. Hiring an experienced New York City business litigation attorney is crucial to achieving that end.
The Law Offices of Ira S. Newman provides employment law legal counsel in New York City, Great Neck, Long Island and throughout the area. Call 516-487-7375 or contact us through the website.