Siemens Energy Stock Tumbles as GE Sous Rival on Embedded Trade Secret Theft

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Siemens energy

The stock tumbled on Friday, after

general Electric

The suit was sued over the alleged theft of trade secrets of the German company which it claimed were used to win contracts worth billions of dollars.

Shares in the company, a spinoff of

Siemens

Listed in September last year, down 6.3% in early trading. Despite the decline, the stock still rose 44% since its listing.

The suit, filed in US District Court in Virginia on Thursday, alleged that Siemens Energy obtained the trade secrets of American veterans when the two companies were competing on a gas turbine contract for a Virginia-based power utility.

Dominion Energy

In May 2019. It claims that a senior Dominion employee shared the details of GE’s contract bid with a Siemens employee, who then carried on the trade secret for dozens of colleagues, including those responsible for Siemens’ own bid.

Read:GE stock will not go anywhere in 2021. Here is JP Morgan Still Puns It.

Those secrets were then used to improve Siemens’ own bid, eventually winning a contract between $ 225 million and $ 340 million, according to the lawsuit. “Complaining of this injustice, Siemens waited 16 months before revealing to GE that it had nothing to do with GE’s trade secret in September 2020,” People’s Letters Here, in which Siemens misrepresented and his Reduced the scope and impact of unlawful planning. ”According to the filing.

The suit claims that between May 2019 when the proposed spin-off was announced to be completed in September 2020, Siemens Energy will raise as many energy contracts as possible to enhance its financial outlook and push forward its projected stock price. Was “highly motivated” to secure. Its initial public offering.

It alleges that at least eight other gas turbine contracts by Siemens Energy are relevant to “unfairly won” by Siemens Energy in the 16-month period before the German company notified GE. It added that the secrets were still relevant to a pending contract award in South Carolina, with the two companies being contested, adding that the company “consistently refused” to reassure GE, destroying the secrets. Has been done.

Overall, it alleged that the theft enabled Siemens to win “billions of dollars” of contracts at the expense of GE’s ability to compete significantly.

City analysts said the lawsuit was a downside to sentiment over Siemens Energy, which has recently been one of the best performers in the region, noting that litigation may take a long time to come into play.

“However, in terms of share price sensitivity, a $ 1 billion fine – at the upper end of possible scenarios – would potentially equal about € 1.1 / share, or a 3% hit to the closing price on 14 January,” he said. said. “This has to be seen in the context of a 50% rise in the share price of Siemens Energy in the last three months,” he said.

Siemens Energy said it had not yet been officially dealt with the lawsuit, but had learned it through media reports.

A spokesman said Baron’s The company identified the use of trade secrets “through its robust compliance processes” before conducting internal investigations and disclosing the findings of both Dominion and GE.

Read:Siemens turns off its power unit. What does this mean for GE stock.

The company said it had implemented “comprehensive remedial measures” in response, including disciplining the employees involved — seceding from the company — removing “confidential competitive information” from all of its systems and additional for all employees in the US Providing compliance training.

“The integrity of Siemens Energy is fundamental to our operating principles and will not be compromised under any circumstances,” the spokesperson said.

A GE spokesperson said: “At GE, we protect and protect our intellectual property. As this trial goes on, we have no further comment at this time. ”

Dominion Energy declined to comment.