GSI Exchange Lawsuit

gsi exchange lawsuit

GSI Exchange is a global trading platform that offers clients a wide range of products and services. The company’s main area of expertise is physical precious metals.

In a recent decision, a tribunal disqualified an opposing party’s counsel because of an alleged conflict of interest. The issue is whether this is a procedural conflict or one of professional ethics.

Defendant GSI Exchange Inc.

GSI Exchange is a company that deals with wholesale trading of precious metals. Their products include gold, silver, platinum and palladium coins, bars and bullion.

They offer a wide variety of prices for their products so clients can easily compare them and make an informed decision. They also have a great website and helpful resources.

The Texas and Alabama orders accuse GSI of taking a large amount of investor funds as an undisclosed commission or fee on the front-end of each precious metals transaction. The orders also say the company is giving investment advice without a license, which is a third-degree felony.

GSI also took advantage of senior investors, many of whom were seniors with retirement money. The state orders seek to return the money and shut down GSI’s operations.

Defendant ISSI Inc.

ISSI designs and markets high-performance computer memory products for markets including automotive, communications, industrial, medical and military, and digital consumer electronics. Its primary products are low and medium density dynamic random access memory (DRAM) in package and Known Good Die (KGD) form, and high speed and low power static random access memory (SRAM) in package and KGD form.

GSI alleges that UMI breached the Noncompete Clause of the 576 Mb Agreement by misappropriating GSI’s trade secrets and other confidential information for its Atris chip design work. GSI also claims that UMI’s conduct created a genuine dispute as to the meaning of the Atris contract, and that GSI suffered damages due to the alleged breach of the noncompete agreement.

ISSI presents significant evidence that GSI never had documents or testimony to support certain elements of its misappropriation and Section 17200 claims, acted with improper motives, maintained allegations that it knew to be false, and amended its trade secret claims to thwart ISSI’s redesign efforts. These and other underlying factual issues remain in dispute.

Defendant UMI Technologies Inc.

GSI sued UMI and ISSI, two GSI competitors, for breach of contract and misappropriation of trade secrets. After the parties broke off their business relationship, GSI alleged that UMI independently produced a chip that incorporated design components from GSI’s 576 megabyte DRAM chip (the “576 Chip”) and used the GSI Chip to create its own 1.2 gigabyte DRAM chip, which it named “Atris.”

The jury awarded GSI damages of $932,000 against UMI for breach of contract and $421,000 in special damages for profits disgorged by GSI as a result of UMI’s breach of trade secret confidentiality. GSI argues that the trial court improperly granted UMI’s renewed motion for judgment as a matter of law, failed to grant GSI’s motion for attorneys’ fees, and gave an amended jury instruction regarding damages on the last day of deliberations.

In addition to the above, GSI also raised serious discovery deficiencies in motions filed before this Court. These deficiencies include, but are not limited to, UMI’s failure to respond to, not one, but two separate discovery motions (Rec. docs. 132 and 150), and UMI’s failure to appear for a show cause hearing as ordered by this Court.

Defendant Cypress Technologies Inc.

Cypress Technologies is a contract manufacturer. They manufacture electronic devices for their customers, which gives them the opportunity to work on new projects and expand into different areas of expertise.

They strictly prohibit bribery and other improper payments to secure a business advantage, as these can result in criminal prosecution, reputational damage or other harm. Additionally, Cypress also requires that employees sign a Code of Business Conduct and Ethics.

In 2011 Cypress filed a lawsuit against Mushel and his company Eurika Consultants, based in Israel. The complaint alleged that Mushel had misappropriated trade secrets and violated federal law by soliciting Cypress touchscreen engineers and poaching them to Maxim.

Two days after filing the suit, Cypress sought an ex parte temporary restraining order that would prevent Maxim from soliciting any Cypress touchscreen employees and require Maxim to return to Cypress any of the trade secrets it had in its possession. The application was accompanied by a declaration from Cypress’s president, human resources officer and touchscreen technologist.