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What laws would be broken if an employee/former employee was found to have tried to sell confidential information/trade secrets? I understand this would be a civil matter as it’d breach contracts & NDAs signed by the employee, but would it be a criminal offence as well?

The company affected were told by a competitor in the same sector they received an email (no name attached, and an email with a throwaway username) with details of the company’s confidential information and if they’d like to buy more information.

As there is no direct lead, other than a email address, would Action Fraud, the NFIB or NCSC help with uncovering the culprit? Would this come under fraud?

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In the United Kingdom, this could be fraud by abuse of position, under section 4 of the Fraud Act 2006:

A person is in breach of this section if he—

(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,

(b) dishonestly abuses that position, and

(c) intends, by means of the abuse of that position—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

The legal guidance published by the Crown Prosecution Service gives various "examples of the type of conduct that would give rise to a charge under section 4" including:

a director of a company who dishonestly makes use of knowledge gained as a director to make a personal gain …

an employee who transferred sensitive commercial information from his office laptop to his home computer while in employment and used it after that employment had ended …

I have not been able to find a reported prosecution that involved selling confidential information to a competitor, but in Theedom v Nourish Trading Ltd [2016] EWHC 1364 (QB), such an offence was pleaded in defence of a defamation claim:

The defendants alleged that Mr Theedom did supply commercially important, confidential information about CSP's business and its customers' businesses to CSP's commercial rivals, in breach of his contractual obligations … the conduct which I have found proved affords reasonable grounds to suspect an offence of fraud by abuse of position …

Mr Theedom's position was one in which he was expected both to safeguard and not to act against the financial interests of CSP. His conduct, as I have found it to be, could reasonably be considered an "abuse" of that position … he could reasonably be suspected of intending, by "abuse" of his position, to secure gains for his partner and Ms Crutchley, and/or for their employer. His conduct could reasonably found suspicion that he was acting dishonestly.

Fraud cases are notoriously difficult to investigate and prosecute, and the CPS does warn prosecutors to "be particularly mindful that the criminal law is not invoked by complainants for purely commercial purposes." I'm not sure whether the police or other regulators would have the resources to investigate the attempted fraud in the question. If it's a big case, the company would probably fund its own investigation, and forward the results to the police.

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  • If no money or information had been exchanged, would the CPS see this a civil/commercial dispute? I may be wrong, but I think the only reason the company would report the attempted fraud would be for solely ‘commercial purposes’ to protect their secrets/Intellectual property/confidential information. As they were notified of the attempt, they suffered no losses so the only line of enquiry a prosecutor would have would be to track the owner of the email address, or would this not be worth their time & effort? Commented Oct 31, 2023 at 11:26

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