Key Takeaways
- • An arbitrator ordered former Element Capital Management trader Andrew Buonauro to forfeit more than one year of compensation after finding he disclosed proprietary trading information to rival Squarepoint Capital before his departure in 2022.
- • Arbitrator Holly Weiss determined that Buonauro breached his employment agreement by sharing Element's confidential execution systems and counterparty data, including a spreadsheet identifying key trading partners and their technical capabilities, using personal email and laptop accounts to conceal the activity.
- • The arbitration award entitles Element to recover all compensation paid to Buonauro during the period of misconduct, including bonuses and deferred pay, though the arbitrator rejected Element's claims for lost profits and development costs due to insufficient proof of quantifiable damages.
- • Buonauro left Squarepoint in early 2025 and currently works at Citadel Securities; the arbitration decision became public after Element filed to confirm the award in New York court.
Summary
An arbitrator has ruled that Andrew Buonauro, a former trader at Element Capital Management, must forfeit more than a year's worth of compensation after breaching his employment agreement by disclosing proprietary trading information to Squarepoint Capital before his departure in 2022. Arbitrator Holly Weiss concluded that Buonauro knowingly transmitted Element's confidential materials to the rival hedge fund, potentially enabling Squarepoint to replicate Element's execution systems and trading infrastructure.
The arbitration decision, which became public after Element sought court confirmation of the award in New York, found substantial evidence of deliberate misconduct. Weiss noted that Buonauro used personal email accounts and a personal laptop to conceal his actions, demonstrating awareness of the breach's sensitivity. Among the material disclosed was a spreadsheet identifying Element's key trading counterparties and their technical capabilities—information with clear competitive value. Buonauro disputed the findings, claiming the information reflected general market knowledge rather than proprietary secrets, but the arbitrator rejected this defense based on the evidence presented.
The compensation forfeiture encompasses all pay, bonuses, and deferred compensation awarded to Buonauro during the misconduct period. However, the arbitrator rejected Element's claims for lost profits and development costs, finding the hedge fund had not established sufficient proof of quantifiable damages beyond the direct compensation recovery. This distinction reflects the arbitrator's view that while the information disclosure was clearly improper, the broader financial impact could not be conclusively demonstrated.
Buonauro subsequently left Squarepoint Capital in early 2025 and is now employed at Citadel Securities. Neither Buonauro's legal counsel, Element Capital, Squarepoint Capital, nor Citadel Securities responded to requests for comment regarding the arbitration outcome. The ruling underscores ongoing enforcement of restrictive covenants and trade secret protections within the hedge fund industry, where competitive advantages often hinge on proprietary execution systems and counterparty relationships.
The arbitration decision, which became public after Element sought court confirmation of the award in New York, found substantial evidence of deliberate misconduct. Weiss noted that Buonauro used personal email accounts and a personal laptop to conceal his actions, demonstrating awareness of the breach's sensitivity. Among the material disclosed was a spreadsheet identifying Element's key trading counterparties and their technical capabilities—information with clear competitive value. Buonauro disputed the findings, claiming the information reflected general market knowledge rather than proprietary secrets, but the arbitrator rejected this defense based on the evidence presented.
The compensation forfeiture encompasses all pay, bonuses, and deferred compensation awarded to Buonauro during the misconduct period. However, the arbitrator rejected Element's claims for lost profits and development costs, finding the hedge fund had not established sufficient proof of quantifiable damages beyond the direct compensation recovery. This distinction reflects the arbitrator's view that while the information disclosure was clearly improper, the broader financial impact could not be conclusively demonstrated.
Buonauro subsequently left Squarepoint Capital in early 2025 and is now employed at Citadel Securities. Neither Buonauro's legal counsel, Element Capital, Squarepoint Capital, nor Citadel Securities responded to requests for comment regarding the arbitration outcome. The ruling underscores ongoing enforcement of restrictive covenants and trade secret protections within the hedge fund industry, where competitive advantages often hinge on proprietary execution systems and counterparty relationships.
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