The Canadian Imperial Bank of Commerce has turned employee e-mails into a potent legal weapon in an acrimonious court battle with a team of top executives who left the bank last year to form a competing investment firm.
In a lawsuit filed in the Ontario Superior Court, CIBC alleged that six former senior executives, including its one-time vice-chairman David Kassie, improperly recruited bank employees and took confidential bank data to their new company, Genuity Capital Markets.
Such lawsuits are common when company employees are raided by competitors, in order to slow the pace of potential defections. What is less common, however, is for businesses to paw through employee e-mails and publish them in court documents. Many of the e-mails revealed in the CIBC court documents offer an embarrassing portrait of greed and corporate rebellion, with executives boasting about the “tons of moula” they would make by moving to Genuity.
The revealing e-mails are a stark reminder to employees in the digital age that messages they zap into the Internet ether can come back to haunt them.
E-mails have been powerful smoking guns in a variety of corporate scandals in recent years, giving such prosecutors as New York State Attorney-General Eliot Spitzer powerful ammunition to discipline analysts, investment bankers and corporate executives for acting against the interests of their clients.
Legal experts said the CIBC's use of the e-mails in the Genuity case marks one of the first times that a Canadian employer has used such communications against former employees in a public court battle.
“A lot of people on the Street are going to have a few sleepless nights, going through loads of e-mail to delete them when they hear about this case,” said Don Johnston, a technology and privacy specialist at Toronto law firm Aird & Berlis. “But what is so terrifying to people is that they can't really delete their e-mails. They could be stored in any number of places.”
CIBC was able to tap into messages sent by BlackBerrys that the former executives apparently believed were protected by a private system of e-mail communications known as PINning, which involves personal identification numbers or PINs.
The bank's ability to read and publish the BlackBerry e-mails is expected to send chills through the legions of investment bankers and lawyers who conduct all kinds of communications through the ubiquitous portable e-mail devices.
“You mean they broke into the PIN messages, how did they do that?” gasped one Bay Street lawyer and frequent BlackBerry PIN user who declined to be identified.
The CIBC isn't saying how it accessed the BlackBerry messages, but states in its lawsuit that the executives “seemed to have believed [they] did not create any record of their e-mails on the [Bank's] central computer systems.”
Some BlackBerry devices enable users to engage in direct communications outside a central mail server when PIN numbers are exchanged.
Technical experts, however, said systems are available that allow employers to store or download employees' BlackBerry e-mails when the devices are employed to tap into the office e-mail server to retrieve regular e-mails.
“Employees need to be reminded that whether you are using BlackBerrys or web-based e-mail addresses to send mail, their employers still have access to the traffic,” said Michael Geist, a University of Ottawa professor who specializes in technology law.
