Incapital Sues BNY Mellon, Executives Over Secrets

Sunday, 10 February 2013 01:37 PM

(Corrects to show Bank of America Corp. no longer holds an ownership interest in Incapital in story published Feb. 8.)

Feb. 8 (Bloomberg) -- Incapital LLC, a Chicago-based bond underwriter and distributor, sued three former executives for allegedly taking proprietary information to BNY Mellon Capital Markets LLC when they left the firm.

The complaint, filed today at in Illinois state court in Chicago, pits the Bank of New York Mellon Corp. unit against the firm founded in 1999 by Thomas S Ricketts, who also owns Major League Baseball’s Chicago Cubs.

Incapital also accused the BNY Mellon unit of interfering with its clearing relationship with Pershing LLC.

One of the defendants allegedly told one of the other two they would “take the baseball bat to the back of (Incapital’s) skull” upon moving to BNY Mellon, according to the complaint.

Incapital claimed Adam Friedman, Matthew Reilly and Andrew Murray breached contractual obligations to their former firm by scheming to “steal” its third party broker-dealer information. It accused the BNY Mellon unit of contractual interference.

The firm, in which Bank of America Corp. previously held an ownership interest, is seeking a court order compelling the men, each of whom lives in Florida, to immediately return to Incapital any of the firm’s protected information they have in their possession.

Kevin Heine, a spokesman for New York-based BNY Mellon, said by phone that he was unaware of the allegations and declined to comment on them.

In a regulatory filing last year, Bank of America listed Incapital among its direct and indirect subsidiaries as of Dec. 31, 2011. The firm isn’t part of the lender, Jerry Dubrowski, a spokesman for the Charlotte, North Carolina-based bank, said Feb. 10 in an e-mail.

The case is Incapital LLC v. Friedman, 2013ch03994, in the Cook County, Illinois, Circuit Court, Law Division (Chicago).

--Editors: Fred Strasser, Glenn Holdcraft

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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