[ by Howard Haykin ] Citadel, Chicago-based hedge fund manager owned and operated by Kenneth Griffin, filed a court petition accusing high-frequency trading firm, Jump Trading, of stealing its trading algorithms.  Citadel specifically said that at least one of its former employees stole trading algorithms and brought them to Jump Trading, a firm that employs 325 people in Chicago, London and Singapore. All told, since 2005, about 10 people from Citadel's tactical trading group have left the firm and joined Jump Trading.  Over that time, some of the strategies used by Citadel's tactical trading group have become less profitable. According to the fund manager's petition, the strategies are behaving in a way consistent with their having been copied by rivals. Jump Responds. Jump Trading responded to the petition with a motion that categorized the hedge fund's request as frivolous, and an effort to win competitive information through the courts.  Jump also asked that the request be dismissed.  Tessa Wendling is general counsel at Jump. Jump further notes that Citadel had no evidence that the algorithms had become less profitable because of any of Jump's actions. It said that any of the hundreds of other algorithmic trading firms could be at fault. Prior Lawsuit. In 2009, Citadel filed a lawsuit accusing former senior trader Mikhail Malyshev and 2 other ex-employees of violating non-compete clauses in starting their own firm. Malyshev's group at Citadel used trading algorithms to exploit small mispricings in the market.  Citadel successfully won an injunction barring Malyshev and his two colleagues from working at Teza Technologies through November 2009. What Citadel Now Seeks. Citadel's efforts to learn information before even filing a lawsuit reflect just how zealously some hedge funds and Wall Street firms will fight to protect their trading codes, which have become a bigger source of revenue in recent years. The fund manager is looking for Jump to hand over personnel documents, strategy and trading records, and source code. Citadel also wants to take depositions from its former employees who are now at Jump.  And while it is not accusing its former employees of violating non-compete agreements, Citadel does believe employees may have violated non-disclosure agreements. Again, Jump claims that Citadel's petition "is nothing more than a transparent attempt by Citadel to obtain a competitive advantage by gaining access to Jump's proprietary and confidential trading strategies."    [Reuters, 6/4/12]