Timothy Sykes and his business partners have been sued for over $10 million by Scanz Technologies in a lawsuit for allegedly stealing propriety trading platform technology. The news was originally picked up on Twitter when Sykes tweeted about a software issue “glitch”.
Sykes states the following in a Tweet which can further be found here:
Dang, wanted to do another midnight video lesson for tim.ly/eduvest students on $SINT $RLFTF $RVVTF $ZCMD but software issue glitch and nobody else works as hard as I do, sorry guys, will have to post video premarket, it’s a good one!
Apparently there was never a “software glitch”, but more of a lawsuit whoopsie. Given the almost zero media coverage on the lawsuit, we have complied an article detailing our findings in public court documents found on Pacer.com. We suggest readers skim through the original complaint found here to make their own educated conclusions.
Tim Sykes Sued for Over $10 Million in Trading Platform Theft
- Timothy Sykes and partners are being sued for $10 million from Scanz Technologies.
- Defendants in case include JewMon Enterprises, LLC, Timothy Sykes, Zachary Westphal, Timothy Bohen, Millionaire Publishing, LLC (Florida), Millionaire Publishing, LLC (Colorado), Millionaire Media LLC, and STOCKSTOTRADE.COM Inc.
- Scanz Technologies claim defendants stole propriety trading software for estimated damages in excess of $10 million, plus royalties.
- Jewnon, Millionaire Publishing, Millionaire Media and StockstoTrade were controlled by Sykes with assistance of Westphal and Bohen.
Who is Tim Sykes?
Timothy Sykes originally made a name for himself in 2007 for trading penny stocks while attending Tulane University, netting over $1.65 million in day trading profits.
Since then, Sykes has become an infamous name in the online day trading world for using controversial marketing of a luxurious lifestyle to capture attention of potential “students”.
An example of Tim’s over-the-top marketing can been seen on his Instagram page where he posts photos and videos of luxury cars, dream vacations and piles of his own cash.
Given Sykes’ aggressive marketing ploys, there are numerous theories suggesting that Sykes’ is or is not a scammer. We are not diving into that topic on this article, and if you are reading this you probably already have your own theories on Sykes. We suggest you read the following if you want more of a background:
The Lawsuit between Timothy Sykes and Scanz Technologies
Scanz Technologies originally developed proprietary stock trading assets in 2003. The technology Scanz developed was specifically designed for equity traders in the OTC micro-cap marketplace. The technology was marketed in 2004 and developed an extremely loyal fan base.
During 2012 Timothy Sykes approached Scanz for a potential partnership. Sykes wanted access to the technology beyond the “normal” paying subscription and represented Jewmon Enterprises LLC. By early 2013 Scanz and Jemon entered into an agreement.
Court documents found layout the terms of the agreement, stipulations and what should happen if license is terminated:
The license agreement further provided that Jewmon shall not, at any time — even following termination of the license agreement — copy the “look and feel” of any portion of the Scanz Assets, the Scanz Trade Secrets or the user interfaces associated therewith.
The document notes that Scanz retains all ownership rights and JewMon shall not reverse engineer the technology:
In addition, Jewmon further acknowledged through the license agreement that the Scanz Assets and Scanz Trade Secrets, as well as any updates, upgrades, customizations and modifications thereto provided to Jewmon by Scanz, shall at all times remain proprietary to Scanz. In addition to that acknowledgment, Jewmon agreed not to reverse engineer, decompile, disassemble, or otherwise reduce to human-perceivable form the portions of the Scanz Assets or Scanz Trade Secrets provided to it under the agreement.
If the Scanz Technologies and Timothy Sykes parties terminated the agreement all rights to use the product would subsequently be forfeited. In April of 2015 Scanz and Jewmon voluntarily terminated the license agreement.
Sykes begins using market analysis that is similar to Scanz’ proprietary software
During the termination process, Timothy Sykes, Zachary Westphal and Stephan Touizer expressed they would be pursuing business using a different “market analysis” technology. However, by 2016 Scanz noted that Sykes began using a market analysis technology that was similar to the one Scanz developed.
In late August, 2017, Scanz learned that the new Sykes’ market analysis platform contains not only similar functionality as the Scanz Assets, Scanz Trade Secrets and related Scanz product offerings, but actually contains virtually identical functionality as the Scanz Assets, Scanz Trade Secrets and associated Scanz product offerings.
The public Pacer document further states:
Subsequently, throughout the balance of 2017 and continuing up to May of 2018, Scanz continued its investigation and learned that Sykes’ product offerings were actively changing and morphing into systems and products that even further mimicked the Scanz product offerings. Ultimately, in or about May of 2018, Scanz’ concluded that the Sykes market analysis platform not only had progressed to an imitation of Scanz’ product offerings but that the Sykes’ platform had progressed to containing a virtually identical “look and feel” as compared to the most important core features embraced by the Scanz Assets, the Scanz Trade Secrets and the associated Scanz product offerings that were embraced by the express terms of the license agreement.
The documents effectively state that Sykes and his partners pirated Scanz market analysis platform and similar product offerings – using this technology to sell nationally and internationally.
Scanz Technologies estimate they have suffered devastating financial and business injury
Estimated damages for Scanz Technologies is at least $10 million. Scanz also estimates they are entitled to recover a royalty from each defendant for the unauthorized use of the technology. The court documents continue, showing Sykes and defendants could owe much more than the $10 million:
As a further proximate result of the foregoing misappropriation, defendants named in this Count have been unjustly enriched, thus entitling Scanz to an additional award of damages resulting therefrom in a presently unknown sum according to proof either upon entry of summary judgment in Scanz’ favor or at trial before a duly empanelled jury.
Scanz Called Sykes out on Twitter in 2016 for ripping them off
— Scanz (@GetScanz) February 16, 2016
The tweet states:
“@StocksToTrade @timothysykes Congratulations on your attempted carbon-copy ripoff of #EquityFeed with your rinky dink #STT. We’re flattered”
There are additional tweets located in this court document and one that actually references William Karaman.
Conclusion on Timothy Sykes Lawsuit
The lawsuit against Timothy Sykes and his partners is troubling, to say the least. Our initial reading of the document implies that Sykes pirated software from Scanz Technologies, using this technology to market to his “students”. With estimated damages of over $10 million, it seems like Tim will have to finally fork over his Bar Mitzvah money and start over. But since he is such a genius millionaire stock wizard, it’s likely he’ll bounce back.