Two Wyoming bankers have been banned from the industry in a trade secret case that could have implications for others who defect from one bank to another.
The Federal Reserve Board last week barred Mark A. Kiolbasa and Frank E. Smith from being involved in the affairs of any insured depository institution. The two men are former employees of Central Bank and Trust in Lander, Wyo., who later went to work for Farmers State Bank in Pine Bluff, Wyo.
The Fed’s orders, which were announced Tuesday, delivered a harsher penalty than has traditionally happened in cases where bankers take confidential information from their former employer, according to
Typically, bank executives have faced civil penalties — but not the end of their banking careers — for violating state laws that govern the misappropriation of trade secrets.
The Fed’s tough stance in the Wyoming case could deter bank employees from taking sensitive information from their old employer when they move to a new job. It also shows the potentially severe downside for banks that hire employees from a competitor.
In 2018, Central Bank and Trust won judgments totaling more than $2 million against Kiolbasa and Smith after alleging that they misappropriated trade secrets. Later that year, the Fed sought to ban the two bankers from the industry, initiating a legal process before Administrative Law Judge Christopher McNeil.
Last week, McNeil issued
In addition, after one of the bankers had left for Farmers but the other still worked for Central, they strategized about business opportunities that would benefit themselves or the bank where they both would eventually land, the judge found.
