* Judge upholds island’s reputation as being safe for IP rights *
A landmark case being heard in Limassol District Court reached its conclusion last week, whereby Vincent Pfister (photo at left), a former researcher at the international hedge fund firm IKOS was found to have stolen vital codes that could have jeopardised the company and exposed clients to millions if not billions in risk and losses.
However, one of the most important outcomes of the high profile case is that the Cypriot judge defended the island’s reputation as a leading financial services centre, saying that intellectual property rights must be protected, suggesting that other jurisdictions also clamp down on IP theft and copyright abuse.
Perhaps in a moment of compassion, the judge also took into consideration the five children that depended on the accused and instead of throwing Pfister in jail, where he deserved to be for his crimes, let him go with a fine of 25,000 euros.
Just like in a movie, the conspiracy to take down one of the most successful fund manager firms was foiled and the true culprit, namely the founder’s estranged husband, has been exposed for what he is, a conman who, too, deserves to be behind bars.
Our correspondent Petros Mavros sat throughout the proceedings and sent us this report.
"FALSE AND FABRICATED"
The judge had heard that Pfister had at one stage flouted the injunction by posting the memory stick he took to his parents’ address in France after he was served with papers in London, having already been served in Cyprus, where he lived.
In his defence, he had previously said he had done this out of “panic”.
But the judge said: “The opinion of the respondent, namely that he ignored the full provisions of the court order, that he ignored what the problem was and why the proceedings in England had commenced, is also false and fabricated; similarly false and fabricated was the initial opinion regarding his ignorance of the severity of the issue.
“In no case may the court accept his views and his explanations regarding the dispatch of the memory card to France as an innocent reaction or as the reaction of a person in panic. It is the reaction of a person wanting to be considered and presented as the innocent party that is being prosecuted by the plaintiff and is the victim of a personal dispute between the plaintiff’s directors.”
At an earlier hearing, the court was told by IKOS CIF director Ian Mayes: “Pfister was undoubtedly part of Coward’s plans.”
He also alleged the pair downloaded separate but complementary parts of the code and were “in concert” as part of the plan to take on Ambrosiadou’s 2-billion-pound IKOS hedge fund firm.
The court case is one of a string of proceedings which are taking place across Europe which IKOS says are to protect its intellectual property and its investors.
The software and the databases are described as “sacred” in the IKOS set-up.
IKOS have alleged that following mathematician Coward’s resignation from the company, it was discovered he was “conspiring” with a network of employees to set up a rival firm to IKOS.
It is alleged Pfister, who has worked for some of the world’s top investment banks and speaks French, German and Japanese and has a home in London, was one of these employees.
Lawyers acting for IKOS moved quickly after Coward’s resignation to obtain injunctions against Coward stopping him actually using any IKOS software.
During earlier stages of the proceedings Mayes called Pfister “a clever and greedy man”.
The court was told how Pfister denied passing on the precious information to anyone other than his lawyers and said he did not pass it onto Coward.
Pfister admitted the time he returned the codes was after he was served with the injunction in the UK but denied working in league with Coward to set up a rival firm.
Pfister – who faced jail under Cypriot laws over contempt of court actions – was fined 20,000 euro and ordered to pay 5,000 euro costs after being found guilty of contempt of court.
In mitigation, Pfister’s lawyers outlined to Judge Michaelidou that Pfister was a father-of-five who needed to support his family.
A former quantitative researcher stole vital computer codes from star hedge fund manager IKOS as part of a plan to help the estranged husband of the company’s founder to set up a rival firm, a Limassol judge has declared.
“Devious” Vincent Pfister secretly plundered the vital information while he worked for IKOS.
As he was found guilty of contempt of court at a hearing in Cyprus and avoided a jail term, Pfister was branded “untrustworthy” and accused of giving “false” statements to the court by Judge Despina Michaelidou.
The contempt of court proceedings were brought because he ignored two court injunctions served on him which demanded that he return the codes to IKOS he had downloaded.
The judge had heard IKOS lawyers argue that Pfister had taken the priceless codes in order to help Martin Coward, the estranged husband of IKOS founder and CEO Elena Ambrosiadou, set up a rival hedge fund in Monaco.
And in passing her judgment, the judge declared: “It is positively deducted as a rational conclusion that the respondent was looking into the possibility of cooperation with Coward, who appears to have held discussions with other major executives of the applicant, including the respondent, about the possibility of establishing a competing Hedge Fund.
“There exists a clear circumstantial witness statement naturally leading to the conclusion that the respondent acted on the basis of a specific plan for the purpose of extracting intellectual property belonging to the applicant for his own benefit and/or in the context of his future plans for possible cooperation with Coward.”
MONACO PROOF
In presenting her lengthy judgment at the District Court of Limassol, Judge Michaelidou declared to the court among key pieces of evidence which proved the link between the two, was an organisational chart discovered during a raid on the offices of Coward in Monaco which had Pfister’s name on it.
The court case, which had started in June, had earlier heard how Pfister’s name was on the chart outlining the proposed structure of Coward’s planned company when his offices where searched by the judiciary in Monaco last year.
The new company was to be called Flot SAM. The ending “SAM” signifies a Monegasque company and IKOS alleged that the full company name signified Coward’s intention to “sink” IKOS, and create a new company using employees who “jumped ship”.
Pfister, who earned around 300,000 pounds a year in his post as a research manager at IKOS, was hauled into court to face his contempt hearing in Cyprus as he had ignored injunctions served on him in Cyprus and in London which demanded he return to IKOS the computer codes he had downloaded onto a memory stick.
The codes taken by Pfister, and since recovered by IKOS, cover the entire spectrum of trading methodologies at IKOS. With codenames such as Wendy, Fox and Badger, the programmes allow IKOS to invest funds through algorithmic computer generated trades instead of traditional investment management methods making trading faster and more efficient.
