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I am a business development consultant and was recently "informally" contracted with a client to raise capital (in the form of stock sales) in return for a finders fee for whatever money I could raise. Informally contracted in that all of the agreement terms were via email. I did sign an NDA at my initial meeting with the client.
In the midst of trying to get investors that I could introduce to the client, I sent the executive summary to my friend/client and main referrer of business - the president of a local bank - seeking his help in introducing me to wealthy investors. He forwarded the information to what he thought was a potential interested individual in an unrelated industry. This individual turned out to be affiliated with the direct competition of my client's.

Submitted: 194 days and 13 hours ago.
Category: Intellectual Property Law
Value: $30
Status: AWAITING CUSTOMER ACTION
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I am a business development consultant and was recently "informally" contracted with a client to raise capital (in the form of stock sales) in return for a finders fee for whatever money I could raise. Informally contracted in that all of the agreement terms were via email. I did sign an NDA at my initial meeting with the client.
In the midst of trying to get investors that I could introduce to the client, I sent the executive summary to my friend/client and main referrer of business - the president of a local bank - seeking his help in introducing me to wealthy investors. He forwarded the information to what he thought was a potential interested individual in an unrelated industry. This individual turned out to be affiliated with the direct competition of my client's. I don't believe that anything that was exposed was not already available to anyone in the industry. Client has received some kind of notice from the competitor and is obviously upset. I fear a suit is coming

Posted by PaulMJD 194 days and 13 hours ago.

Answer

If you did not sign any NDA and you sent out an executive summary with information that was publically available then you have nothing to fear regarding any type of suit. They would have to prove you had a duty not to disclose that information and that your disclosure somehow damaged the company. You need to disclose certain information to interest investors and if that was the information you disclosed, you did nothing wrong AND there was no NDA preventing you from disclosing information anyhow.


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194 days and 13 hours ago.

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Thanks for your quick reply. I did sign a copy of the NDA and was given a copy with the clients signature. I don't have a copy with both signatures. I openly stated many times that I would be sharing summary information with potential investors and would leave the presentation of "proprietary" information to the clients during a formal presentation. I share many clients with my banker friend so did not think about an NDA for him. He sends it to a drinking/golfing buddy and all hell breaks loose.

Accepted Answer

Sorry, I misread and thought you stated you had not signed a NDA before releasing the information.The problem here is that if you disclosed the proprietary information to your banker friend and he disclosed it, then you could be liable for that disclosure. However, if the information was not proprietary information but information that was readily available and accessible to the public from other sources, you would have a defense to any such disclosures AND you had to make some disclosures to solicit clients.

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Expert: PaulMJD
Pos. Feedback: 99.2 %
Accepts: 
Answered: 5/12/2009

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194 days and 13 hours ago.

Reply

Thanks.

Posted by PaulMJD 194 days and 13 hours ago.

Answer

Thank you.

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