Ikos defends itself against staff surveillance claims

Secretive hedge fund Ikos has defended itself against allegations made via the press that it conducted intrusive surveillance of senior staff using an independent ‘agent’.

A number of outlets reported allegations made in a UK court case by Tobin Gover, a former employee of the $2.5bn fund, that Ikos founder Elena Ambrosiadou hired a “security consultant involved in covert close protection and undercover investigations … trained in unarmed combat”.

The allegations rocked London’s hedge fund community this week, not least because the hedge fund founded 20 years ago by Ambrosiadou and her now-estranged partner, Martin Coward keeps an extremely low profile.

Coward wrote some of the software behind Ikos’s successful trading programs.

Gover alleged the surveillance on him was to gather information to aid litigation against him, brought since his departure in late 2008.

Ikos responded in a statement yesterday, dubbing press reports “misleading and inaccurate” and saying it “acts lawfully to protect its investors’ interests.

“After discovering the theft of Ikos confidential information, software and trade secrets, the firm initiated investigations and subsequent civil actions against a number of former employees, including Martin Coward. Criminal investigations are being pursued by the authorities in Cyprus and Monaco.”

It added Ikos has “taken all appropriate steps to protect its technology and has obtained injunctions to prevent any unlawful use of its software and databases.”

It added: “Over a number of years, Martin Coward and his acolytes conspired to take control of the company and misappropriate its technology. In 2009, whilst still a director of Ikos, in conflict of interest and in breach of his fiduciary duties, Martin Coward started recruiting internally, working against the company, seeking to undermine investor confidence, and taking active steps to set up a rival hedge fund.

“Ikos discovered the unauthorised copying of its software by a number of former staff, and used internal company controls, litigation and legitimate investigative efforts to protect its interests and to uncover the full scale of the wrongdoings.”

The group said these issues are now being investigated by the Cyrpus police cyber crime unit and in Monaco. “Search warrants have been executed, evidence seized and admissions have been secured.”

It attacked Coward for “an avalanche of indiscriminate litigation…regardless of expense or consequence”, to “generate damaging publicity to Ikos. Ikos will not tolerate such conduct and injunctions have been obtained to protect the interests of investors.”

It added Coward had commenced proceedings in England last August claiming to have ownership of Ikos software “only to abandon his claim in May 2011, just two days before Ikos was due to file its defence and counterclaim.

“Ikos is now taking robust legal action to recover any misappropriated software and enforce its rights. Martin Coward and other former staff are prevented by injunctions from using Ikos’s technology in any way.

“Any investigations authorised by Ikos were necessary and appropriate to protect its business and its investors.”

Neither Coward nor Gover could be contacted.

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David Walker

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