Dive Brief:
- Flexible Finance filed a voluntary motion to dismiss a suit against a former candidate for its CFO seat and rival payment service Split Pay alleging the candidate had shared trade secrets, according to a court document first filed Monday.
- The motion for dismissal, refiled Tuesday at the request of the court to address certain errors, asks the U.S. District Court for the Southern District of New York to dismiss claims filed in early August against defendants Split Pay and Alex Anderson — a finance executive who previously interviewed for Flex’s CFO seat. The motion comes after both parties asserted they were working in “good faith” to resolve the suit in late August, which alleged Anderson had illicitly shared trade secrets with Split while interviewing for the same position at the rival service, CFO Dive previously reported.
- According to the Monday dismissal motion, defendants “represent that Flex Confidential Information was not shared by Mr. Anderson with anyone at Split Pay and agree that Flex Confidential Information will not be shared with anyone at Split Pay,” the filing with the U.S. District Court for the Southern District of New York states. The motion is set to be reviewed by the court.
Dive Insight:
Anderson, whose previous experience includes finance roles at Cash App and Square owner Block, is currently listed as Split’s CFO on the company’s about page and on his LinkedIn profile, which states he took the role this August. Split posted an announcement of his hiring on their LinkedIn page on Sept. 9, shortly after both parties told the court in an Aug. 31 filing that they were working to resolve the suit.
Both New York-based Flex and Miami, Florida-based Split Pay offer services that enable users to break larger transactions, such as rent or mortgage payments, into smaller amounts, according to their respective websites.
Flex first filed its complaint against Anderson and the rival payment company on Aug. 3, alleging Anderson had taken advantage of information gained during his Flex interview process to pass on trade secrets, CFO Dive reported.
That included the alleged sharing of the Flex Margin Model, its most sensitive financial model, and a confidential memo addressed to Flex’s board, with Split — where Anderson was interviewing for the same position, unbeknownst to Flex, according to the allegations in the complaint.
Following the complaint, the court under Judge Margaret M. Garnett approved a third-party forensic accountant to review Anderson’s personal devices, cloud and email accounts to find and preserve any confidential information as previously defined under his non-disclosure agreement with Flex, CFO Dive previously reported.
The order also asked for affidavits from Anderson and Split’s co-founder and CEO Andrew Borovsky attesting they had not accessed or received confidential information — with Flex receiving affidavits from Borovsky, a fellow Square alumnus, and the third-party forensic vendor as of Aug. 31.
According to the Monday dismissal request, Split and Anderson represent that the forensic vendor has deleted any confidential information as defined under the NDA “based on its reasonable investigation and discussions with Mr. Anderson,” from his personal computer, email and devices.
Split and Anderson denied any wrongdoing associated with the Aug. 3 allegations, according to the Monday dismissal motion. The defendants also noted that confidential information had not been and would not be shared with Split, according to the motion.
Attorneys for Flex and attorneys for Split Pay and Anderson did not immediately respond to requests for comment.
