Editor’s note: Executive recruiter David Nosal was convicted last week of hacking and stealing trade secrets from Korn/Ferry even though he personally never broke into a computer.
According to the FBI, in 2004 Nosal convinced two of his former Korn/Ferry colleagues to download sources lists from the search firm’s computers, which he and they would then use in a search business Nosal was launching.
Wired called Nosal’s prosecution “a novel application of the Computer Fraud and Abuse Act,” detailed the case’s lengthy history, which includes an appeal upholding the dismissal of several of the initial charges against him.
In his commentary, Jeff Allen provides some additional detail and offers advice on protecting a firm’s proprietary information. Firm owner and CPA Bill Gibbens provides an even deeper look at the internal accounting controls all firm owners should have in place. His post discusses both protection of your intellectual property, as well as your financial assets. His post is here.
Recruiters across the country are all abuzz at the stunning jury verdict just handed down from the U.S. District Court in San Francisco in the criminal trial of David Nosal, the former Korn/Ferry International recruiter (United States v. Nosal, 2013 U.S. Dist. LEXIS 28582).
Nosal was unanimously convicted after only two days of deliberation. On all counts — conspiracy, stealing trade secrets, and violating the Computer Fraud and Abuse Act (18 USC 1030, et seq.).
In 2004, Nosal resigned from Korn/Ferry. As part of his separation agreement, he agreed not to compete with Korn/Ferry for one year. Within a few months, his former coworkers still employed by Korn/Ferry downloaded Korn/Ferry’s client and candidate data. Then they joined Nosal at Nosal Partners, by then a Korn/Ferry competitor.
In 2005, FBI agents raided Nosal Partners, and they found the evidence of the criminal activity used to nail Nosal.
Jeffrey G. Allen, J.D., C.P.C. has been TFL’s trusted legal advisor for 32 years , and wrote the “The Allen Law” (the only industry trade secrets statute ever written). If you want to learn more from Jeff’s offices about this vital protection for your files,
Korn/Ferry’s civil case against Nosal is still proceeding in Northern California. His troubles are just beginning after this incredibly important verdict: Guilty as charged.
