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Virtu Financial Fights for $3.2M Fee Award in Trade Secret Case

January 7, 2021 | Posted in : Expenses / Costs, Fee Award, Fee Award Factors, Fee Recommendation, Fee Reduction, Fee Request, Fee Shifting, Hourly Rates, Hours Billled, Prevailing Party Issues, Staffing Issues

A recent Law 360 story by Adam Lidgett, “Virtu Fights for $3.2M Fee Award Against Ex-Worker” reports that a unit of high-frequency trading firm Virtu Financial has shot back at a recommendation that it should only get about $401,500 in attorney fees and costs after scoring a win in a trade secret case against an ex-employee, arguing it should be able to collect millions of dollars.

KCG Holdings Inc., which prevailed in its trade secret misappropriation case in March against Rohit Khandekar, filed an opposition to U.S. Magistrate Judge Gabriel W. Gorenstein's recommendation that it only get about $401,500 in fees and costs.  KCG said it should get more than $3.18 million in fees and costs — less than the nearly $3.6 million it initially asked for.  The firm said it wasn't challenging every reduction in the recommendation, but it did have issues.  While the magistrate judge said that "the relief KCG ultimately obtained was 'limited as compared to the relief sought,'" KCG said it actually was quite successful, for instance.

"This result was not the inevitable conclusion of a routine breach-of-contract lawsuit, as the report contends," KCG said.  "It was the exhausting finish to a hard-fought legal battle wherein Khandekar employed every litigation tool available to him."  Khandekar also hit back at the magistrate judge's recommendation, saying the court should cut the recommended amount down to something more "reasonable."  That $401,500 figure accounts for 80% of his entire wealth, and the court should reduce what is recommended so "Khandekar does not need to sell his home," he said.

In his early December report and recommendation, Judge Gorenstein said the rates KCG proposed were out of step with precedent requiring the court to consider rates in relation to attorneys of "average skill and ordinary competence."  Judge Gorenstein also found that the amount of hours KCG billed for was "vastly excessive," as was the number of attorneys on the case.

In opposing KCG's June motion for attorney fees, Khandekar had argued it should be rejected in its entirety for being "so outrageously excessive and unreasonable that it could not possibly have been made in good faith."  But Judge Gorenstein had rejected that argument, saying a case Khandekar relied on to support it involved a party that made repeated misrepresentations to the court.