Court Sanctions Envestnet for Deleted Data in Trade Secrets Suit

A federal judge sanctioned Envestnet Inc. for destroying “highly relevant” evidence in a lawsuit accusing it of stealing trade secrets from Financial Apps LLC to develop a copycat product that generates financial reports.

FinApps will be allowed to present evidence of spoliation at an upcoming trial and the jury will be permitted to presume the evidence would be unfavorable to Envestnet, according to an order issued Tuesday in the US District Court for the District of Delaware.

Judge Jennifer L. Hall overruled Envestnet’s objections and fully adopted Special Master Chad S.C. Stover’s August report recommending sanctions. Envestnet acted with intent ...