October 10, 2013 – After hearing a half hour of arguments, the judge in the trade secrets theft case of executive recruiter David Nosal put sentencing over and ordered an evidentiary hearing to determine the amount of loss Mr. Nosal caused by stealing trade secrets. Mr. Nosal, founding chairman and CEO of San Francisco-based Nosal Partners LLC, was convicted of all charges in a six-count indictment by a federal jury last May that found Mr. Nosal to have conspired to gain unauthorized access to the computer system of his former employer, Korn/Ferry International, and to illegally obtaining its trade secrets in 2004 and 2005. Mr. Nosal, who was Korn/Ferry’s highest producer at the time he departed the firm and head of its CEO headhunting practice in Redwood City, was accused of conspiring with former Korn/Ferry colleagues to help him start a rival search business by having them download large numbers of source lists prior to their own departures from the firm. The guilty verdict five months ago followed a two-week jury trial. David P. Riordan, Mr. Nosal’s lead counsel for the last five years, called the jury verdict at the time “a setback,” albeit “a temporary one,” he said. “One key question as a result of the theft of trade secrets was how much did Korn/Ferry suffer economically as a result of Mr. Nosal’s actions,” said Scott A. Scanlon, managing director of recruiting industry research firm HSZ Media, LLC. “A hearing set for December 18 will attempt to put up an answer; this will then be followed by a sentencing hearing.” The maximum statutory penalties in the case range from five to 10 years’ imprisonment and combined fines of $500,000 plus restitution if appropriate.
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