The facts in FundsXpress v. Digital Insight, et alia, are emerging only incrementally at this writing. The only publicly available data on the suit are the documents in the case file, online renditions of which are available at the meepzorp.org FX v. DGIN website. However, the facts we do have suggest a story of corporate espionage, betrayal and dishonesty.
The complaint alleges the following:
Between May and November of 2001, three sales representatives from FundsXpress, an Internet banking company, went to work for Digital Insight, a competing Internet banking company, in violation of the non-compete agreements they signed at FundsXpress. They took FundsXpress trade secrets and copyrighted information with them to their new employer. One representative, Gifford Dunn, remained employed at FundsXpress after he began work at Digital Insight, and used his continued access to FundsXpress data to smuggle information out to his new employer.
At least one manager at Digital Insight, Eric Edwards, knew of this activity. The complaint alleges that multiple members of Digital Insight's top management team, including its CEO, also knew of these acts of corporate espionage.
At first glance, this doesn't look like a matter to concern anyone outside of FundsXpress and Digital Insight. It's not as superficially compelling as the Enron and Worldcom scams; there haven't been thousands of layoffs or millions of stockholders left holding the bag.
The underlying issues, however, are potentially as serious as any of these more prominent stories of corporate scandal. Companies which do business with banks are held to high legal standards and are subject to strong restrictions on their behavior, and for good reason. If a company is trusted to perform transactions on behalf of a bank, it has the potential to do great financial harm. Such companies should not be run by crooks. If FundsXpress's claims are true, and they appear to be, Digital Insight is run by crooks. Should they be trusted to handle other people's money?
Even if the direct harm caused by this incident was not as bad as that caused by Enron or Worldcom, it was still harmful. FundsXpress performed a round of layoffs in August 2001 after a precipitate drop in sales which coincided with the beginning of Digitial Insight's alleged corporate espionage. Thirty-nine people lost their jobs. I was one of them, and so were several of my friends at FundsXpress.
If you have information which could help FundsXpress in its effort to recover the losses it sustained due to Digital Insight's activities, please email their attorney, Jim George. It would be best if you could testify to what you know, but even if you can't, your information may help him in his inquiries.