Financial technology startup
FinancialApps is suing
Envestnet for an alleged multi-year scheme to steal proprietary technology and trade secrets.
FinApps founder Bob Sullivan claims Envestnet (specifically, the Yodlee division) aimed to build its own software that competes with the technology he built. Mr. Sullivan is seeking $100 million in damages from the $3 billion turnkey asset management platform and technology provider.
(More: Envestnet launches tools to help improve adviser decisions)
Mr. Sullivan founded FinApps in 2014 to create technology that analyzes consumer financial data for quicker, more efficient and more accurate credit risk assessments. According to a complaint filed last week in Delaware District Court, Yodlee approached FinApps about a strategic partnership in 2016 and licensed its technology to develop a new platform together to be called "Risk Insight."
Instead of a partnership, though, Yodlee allegedly used the licensing agreement to access FinApps' technology and develop its own platform, the lawsuit said.
"FinancialApps developed brilliant technology which disrupts the credit and lending market, allowing financial service companies to evaluate credit risk more effectively than ever before," said Marc Kasowitz, an attorney representing the firm and a partner at Kasowitz Benson Torres. "Envestnet and Yodlee have deliberately stolen FinApps' technology, which is entirely unwarranted and unlawful."
At Envestnet's 2016 Advisor Summit conference, then-president of Yodlee Anil Arora revealed a
library of personal finance widgets called FinApps. The suite included adds for financial wellness, credit, mortgage payments and college tuition, and Envestnet announced plans to integrate them into its platform for advisers.
(More: Making the future of financial advice as effortless as Uber will be no easy ride)
Despite the similarity in names and in technology capabilities, the lawsuit does not mention Envestnet's app library. Mr. Kasowitz did not say if there was a connection between the two.
The lawsuit also alleges that Yodlee made agreements with third parties to sell access to the Risk Insight platform while minimizing or obscuring FinApps' contribution.
For example, Yodlee announced a deal with Equifax in 2018 to simplify the mortgage loan process by making it easier to derive insights from borrowers' financial data, but it did not mention the technology was developed by FinApps.
Mr. Kasowitz is the former personal attorney for President Donald Trump, representing the President in
sexual misconduct allegations during the 2016 presidential campaign and during Mr. Trump's presidency through the investigation into
Russian interference in the election. Mr. Kasowitz
resigned from Trump's legal team in July 2017, but is still actively engaged in litigation on Mr. Trump's behalf as an adviser.
A spokeswoman for Envestnet and Yodlee said the companies could not comment on pending litigation as a matter of policy.
"However, we hold ourselves to the highest ethical standards with regard to business dealings with customers, partners, and employees, and we will respond appropriately through the proper legal channels," the spokeswoman said in an email.
