Canada Rocked By Recruiting ScandalCIBC sues Genuity for recruiting its employees.
The Canadian Imperial Bank of Commerce is suing 6 ex-employees for recruiting colleagues.
1) they recruited colleagues for a new venture
2) they violated non-solicitation agreements in doing so
3) they took confidential info when they left
The Genuity Six:
1. David Kassie: ex-CEO CIBC World Markets
2. Danny Daviau: ex Co-Head of Investment Banking
3. Phil Evershed: ran CIBC's mergers and acquisitions
4. Earl Rotman: vice-chair of CIBC World Markets
5. Johnny Esteireiro: CIBC's head trader
6. Marie Cordero: a CIBC IT Specialist
Everyone went to Genuity Capital Markets, Davey Kassie's new firm. And Genuity claims to be surprised by the suit!
Kassie comes out swingin'
David "Kingfish" Kassie, the alleged ringleader of the plot denies that Genuity stole people. And, besides, he says, he wasn't bound by any restrictions anyway. And Genuity didn't take any client files either! So there.
The Main Event
Kassie got the boot from CIBC last February - after 25 years with the firm. Apparently, he was the fall-guy for an Enron-related banking scandal. And, supposedly, this is a grudge match between him and ex-boss, "Handsome" Johnny Hunkin.
Known for aggressive tactics, these two bruisers made CIBC World Markets the most powerful investment firm in Canada.
Kassie says CIBC has been bleeding people because they couldn't stand his replacement. Inotherwords: they were nothin' without me.
After I left, Gerry McCaughey was appointed CEO of World Markets. He had no prior experience in the wholesale business.
The common complaint was that he lacked vision in the investment banking business and showed no leadership and had no interest in meeting with clients.
When he was terminated by CIBC in February, Kassie got:
1) a $4.5-million severance package
2) deferred compensation worth over $50-million.
The Recruiting Scandal
Danny Daviau left CIBC in May 2004.
Phil Evershed left in June.
They both got over $3-million in salary and severance
And they were both on the payroll until Oct. 31.
CIBC says they agreed not to “directly or indirectly solicit” their former colleagues for 21 months. But their email shows they were recruiting for Genuity during the summer of 2004!
The Smoking Guns
The case was cracked by probing emails which show the perps trying to hide sensitive information.
1) Evershed to Daviau: “Dan--delete this email address.”
2) Evershed to his secretary: “pls delete everything.”
3) Daviau to Evershed: “Threatened him with his life if he says anything.”
Rotman Didn't Squeal
Brian Shaw, the new head of CIBC World Markets, is gunning for Earl Rotman. He swears that Earl lied when he said he wasn't talking to Genuity. And he claims Rotman's failure to fink on defectors was a breach of his executive obligations.
Did Cordero Copy Files?
CIBC claims Marie Cordero copied client info to a CD and took it to Genuity. Cordero says it isn't so. She says she tried to copy an email list but was unable to do so successfully. And, besides it was only for a subordinate, not Genuity.
1) $10-million in damages, plus costs
2) any compensation paid while employees were planning Genuity
3) all of Genuity's
4) the right to inspect the IT equipment of ex-employees
The defendants agreed to divulge the contents of their computer devices to a court-appointed lawyer who will safeguard the data.
See Also: Genuity Gang Strikes Back -- CIBC Recruiting Scandal -- David Kassie, Kingpin -- David Kassie's Dream -- Dan Daviau -- Earl Rotman -- Kassie Defiant -- Phil Evershed -- Hirst, Morrison, Eggertson -- Marie Cordero -- Bad 4 Recruiters -- Sweet Marie -- The Kassie Cult -- Kassie Honoured -- Hunkin's Millions -- BlackBerry Got 'Em -- Kassie Family Hunted -- Blackberry Mystery Solved -- The Genuity Revolution -- Technorati Tag: Genuity