The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Zeptonics Hit By Legal Ruling; Cannot Sell Ultra-Low-Latency Products

Australian financial trading technology vendor Zeptonics has been directed by the Federal Court of Australia to assign the ownership of certain of its products – including its ZeptoLink fanout device and ZeptoMatch matching engine – to proprietary trading firm Zomojo, which claimed ownership of them. It is considering appealing the decision, but for now it cannot sell them or support any companies using or evaluating them.

Zomojo claimed – and the court ruled – that ownership of ZeptoLink, ZeptoMatch (a matching engine), ZeptoNIC (a network interface card) and ZeptoAccess KRX (a trading gateway for the Korean Stock Exchange) resided with itself. As such, Zeptonics is not allowed to sell or support the use of those products. Zeptonics previously announced sales of ZeptoLink and its ZeptoMux switch to a Chicago-based trading firm, and say that “around half of the world’s top ten proprietary trading firms, have been in the process of trialing” its technology.

ZeptoMux – a many-to-one multiplexer with latency of 130 nanoseconds – is not covered by the ruling.

Without getting into all of the background and detail – the court ruling runs to 183 pages – at the heart of the dispute is Zeptonics founder Matthew Hurd, who worked at Zomojo for several years as its co-managing director and head of IT development.

Essentially, Hurd became unhappy working at Zomojo and left the company early in 2011, founding Zeptonics around the same time. Zomojo claims that Zeptonics’ technology is based on that developed by Hurd while he worked for it.

Zeptonics says that it believes it has “substantial grounds for appeal,” but has not determined whether to take that route. For its part, Zomojo does not seem interested in becoming a technology vendor, and is seeking the return of ZeptoLink devices installed at other trading firms.

The moral of the story: considerable due diligence is required when buying technology, especially when it is cutting edge from niche vendors, and likely to provide a real advantage.

Related content

WEBINAR

Recorded Webinar: Data as a Service: Realizing its Value for Data Management

Don’t miss this opportunity to view the recording of this recently held webinar. Faced with substantial and rapidly changing regulatory demands, trading firms are realizing the need for agility in the way they handle data. With global regulations like MiFID II and FRTB reshaping data requirements – and the prospect of future measures introducing yet...

BLOG

Beeks’ Colocation-as-a-Service Offers Agile Test Access to SGX

Beeks Group’s Colocation-as-a-Service (CaaS) collaboration with the Singapore Exchange (SGX), announced last week, offers market participants rapid access to high-speed connectivity without a major financial or contractual commitment. The facility allows firms to test new approaches and products, using on-demand virtual machine (VM) access, then easily shift to a bare-metal production environment should the test...

EVENT

Data Management Summit London

The Data Management Summit Virtual explores how financial institutions are shifting from defensive to offensive data management strategies, to improve operational efficiency and revenue enhancing opportunities. We’ll be putting the business lens on data and deep diving into the data management capabilities needed to deliver on business outcomes.

GUIDE

MiFID II handbook, third edition – How compliant are you?

Six months after Markets in Financial Instruments Directive II (MiFID II) went live, how compliant is your organisation? If you took a tactical approach to cross the compliance line on January 3, 2018, how are you reviewing and renewing systems to take a more strategic approach and what are the business benefits of doing so?...