So I'm selling my 12-year-old commercial cleaning company. Had a guy come in through the broker, name was 'David Chen,' said he was an independent investor. Signed the NDA, got the CIM, seemed normal. Three days later my best employee texts me a screenshot from a local business FB group. The profile 'David Chen' is actually my biggest competitor's nephew. Same phone number in the group as the one on the NDA. I just sat there staring at my coffee for like ten minutes. Anyone dealt with this? Do I have any actual recourse or is this just business as usual?
NDA
How I caught a competitor using a fake name to sign my NDA
Business as usual, unfortunately. The NDA is worth the paper it's printed on unless you want to pay a lawyer $400/hr to chase a guy who probably didn't take anything of value anyway.
Wait, did he use a fake name on a legal document? That's not just a breach, that's potentially fraud. Did you verify his ID at any point?
Yikes. This is why I always ask for a driver's license copy before sending the CIM. Awkward conversation but it filters out the tire-kizckers too.
@delta_bravo_99 I mean sure, in theory. In practice, good luck getting the DA interested in a civil cleaning-company dispute. He didn't steal money, he stole information. Cops don't care.
The real question is whether the 'nephew' actually was acting on his own or if your competitor sent him. If it's the latter, that's a totally different conversation. Might be worth a strongly worded letter to the competitor's attorney just to make them sweat.
This is wild. Small business M&A is the Wild West, I swear.
Also how did he sign the NDA? DocuSign tracks IP addresses. Might be worth grabbing that audit trail before it gets purged.
OP, do you even know if the competitor got anything out of the CIM? Like customer list, pricing, that kinda stuff? Because if they did, you have a much better stoy to tell.
@NotTheDroids my client list is my whole business. I sent the full CIM. Don't know exactly what they've done with it yet.
The IP address thing is a good call. Also check if he used a work email that resolves to the competitor's domain anywhere in the DocuSign logs.
Everyone giving OP legal advice like any of this is enforceable. Unless the competitor themselves signed under a fake name (they didn't), you're chasing the nephew. And he's probably broke.
@tractorbeam that's a bit fatalistic. A cease and desist from a real attorney costs a few hundred bucks and gets the competitor's general counsel sweabting. Doesn't have to be a full lawsuit.
Yeah I'd at least send the C&D. Even if it goes nowhere, it puts them on notice. Also fire your broker, they should have caught this.
Wait, did OP fire the broker or not? That's the real question.