* All names and identities are fictitious and have been changed.
THE PROBLEM: Horizon Communications is a cutting-edge mobile technology company that recently acquired RavenWave, LLC; a small tech firm in the related, but non-competing area of virtual reality (VR) software.
RavenWave was seamlessly positioned as the mobile giant’s new business unit. While most of the previous RavenWave management team accepted buy-out packages, others were persuaded to stay and tasked with managing the new VR brand to the next level.
Barely a year after the merger, a competitive VR brand called ReelLife, Inc. suddenly entered the niche market. ReelLife quickly established itself as a leading name and caught the attention of Horizon executives. Upon examination, Horizon realized that ReelLife was owned and operated by a group of former RavenWave employees.
There were two issues with ReelLife’s startup: It was a possible breach of the employees’ buy-out agreement, and the competition they created drastically impacted RavenWave sales under Horizon’s new ownership. Horizon’s in-house legal counsel quickly considered the legal options available to them.
THE SOLUTION: Digital4nx Group was contracted to help support possible legal action. After speaking with Horizon executives and counsel, Digital4nx determined the best way to proceed was to secure and analyze electronic devices, select servers, network activity, and email communications of all former RavenWave employees. If evidence collected confirmed signs of intellectual property or proprietary information theft, the forensic analysts would generate a comprehensive digital evidence report that Horizon lawyers could use to build a case against the suspects. The forensic analysts would also defend their evidentiary findings in court as Expert Witnesses.
Within two weeks of being hired, Digital4nx extracted evidence that not only proved foul play, but they uncovered a secret that almost everyone from Horizon and RavenWave never suspected. While several former RavenWave executive-level employees were downloading and stealing data now owned by Horizon, uncovered deleted emails showed former RavenWave employees discussing the ReelLife startup to compete and destroy Horizon’s new VR division. The biggest surprise came when Digital4nx analysts revealed that RavenWave’s current CEO, Jasmin Wrightman, who stayed on to lead the new Horizon VR division after the merger, was quietly leading the development and growth of ReelLife behind the scenes.
THE FINAL OUTCOME: Court action was immediately initiated so Horizon could recoup an estimated revenue loss of $500 million to be paid by ReelLife. Ms. Wrightman was terminated, and the terms of her current Horizon contract were renegotiated: Digital evidence revealed she negotiated during the merger under highly favorable conditions, with plans of resigning once ReelLife was fully established. She had clearly negotiated in bad faith and never intended staying with the new Horizon division. Ms. Wrightman was found to have repeatedly passed highly sensitive information to her former colleagues at ReelLife, and even conspired to mismanage RavenWave, leaving the market open for ReelLife to enter as direct competition. Final court decisions on payout amount is currently pending because ReelLife has filed for bankruptcy.
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Disclaimer: The information contained in this case study is educational only. This is not intended to fully cover everything related to the investigation or constitute expert advice, legal advice or otherwise. You should always seek the advice and counsel of an attorney while proceeding with these matters. Results may vary as each case is unique and the types of artifacts may not exist depending on many variables. Contact us for a confidential initial consultation.
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