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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
Index No. 651341/2020
BRUCE KIM
Plaintiff,
AMENDED SUMMONS
-against-
JURY TRIAL DEMANDED
XP SECURITIES, LLC, n/k/a XP
INVESTMENTS US, LLC, XP
INVESTIMENTOS S.A., and PEDRO
HENRIQUE CRISTOFORO DA SILVEIRA,
Defendants.
TO THE ABOVE-NAMED DEFENDANTS:
You are hereby summoned to answer the complaint in this action and to serve a copy of
your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance, on the Plaintiff’s attorney within 20 days after the service of this summons,
exclusive of the day of service (or within 30 days after the service is complete if this summons is
not personally delivered to you within the State of New York); and in case of your failure to
appear or answer, judgment will be taken against you by default for the relief demanded in the
complaint.
Plaintiff designates venue in New York County as the county in which a substantial part
of the events or omissions giving rise to the claim occurred.
Dated: New York, New York
March 23, 2020
LAW OFFICE OF ALEXANDER SAKIN, LLC
/s/ Alexander Sakin
Alexander Sakin
80 Broad St., Suite 703
New York, NY 10004
(646) 790-3108
Attorney for Plaintiff
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
Index No. 651341/2020
BRUCE KIM
Plaintiff,
FIRST AMENDED COMPLAINT
-against-
XP SECURITIES, LLC, n/k/a XP
INVESTMENTS US, LLC, XP
INVESTIMENTOS S.A., and PEDRO
HENRIQUE CRISTOFORO DA SILVEIRA,
Defendants.
PRELIMINARY STATEMENT
1. Bruce Kim, a professional with decades of experience in the emerging markets
foreign exchange (Forex) community, brings this action sounding in fraud, breach of contract,
and breach of the implied covenant of good faith and fair dealing, against his employer XP
Securities, LLC, n/k/a XP Investments US, LLC (“XPI”), and XP Investimentos S.A. (“XP
S.A.”), and Pedro Henrique Cristoforo da Silveira (“Silveira” or “Pedro Silveira”), the XPI and
XP S.A. executive instrumental in fraudulently luring Kim, on behalf of XPI and XP S.A., to
take a job as Head of XPI’s Asia Forex desk.
2. In 2017, when he was hired by XPI, Kim was a veteran of the Forex industry who
had conceived a technology-enabled solution that later came to be called “HUBL,” designed to
radically improve Forex trading. Kim was looking for a firm that would help him to develop
HUBL into a functioning trading platform that would generate tremendous value for Kim, his
employer, and its clients. On the other hand, XPI, then wholly owned by XP S.A., a Brazilian
financial services giant with an extensive presence in its home country but limited track record in
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the U.S., was looking to expand its existing U.S. operations and was eager to retain Kim, an
individual with an excellent reputation and extensive contacts, whose business strategies relied
heavily on the use of technology-based business solutions. XPI viewed this as an opportunity to
strengthen their position in this niche space, and the fact that Kim’s approach was technology-
driven had tremendous appeal for XPI. As it turned out, so eager was XPI to retain Kim, it was
willing to resort to fraud.
3. As he negotiated the terms of his potential employment with XPI, Kim was
considering a competing job offer from a more established firm – a circumstance of which XPI
was aware. Yet Kim was willing to accept a job at XPI, even though XPI offered significantly
less upfront compensation.
4. To lure Kim, and to convince him to take a chance on XPI, Defendant Pedro
Silveira, a Controlling Partner of XPI and XP S.A., and the Head of its off-shore businesses, was
willing to go as far as it takes, including as far as fraud, to achieve his goals.
5. Kim was induced by Silveira’s assurances – which turned out to be knowingly
false at the time they were made – that XPI was in possession of basic underlying technology
and infrastructure necessary to build commercially viable products in discussion, including, most
importantly, HUBL. And Kim was further attracted by XPI’s contractual promise that it would
fund the development and implementation of HUBL.
6. As of today, more than two years after Kim’s fateful move, XP S.A. has realized
great success in the U.S. In December 2019, XP, Inc., a Cayman Islands exempted company
incorporated for purposes of effectuating an initial public offering and XP S.A.’s new parent
company, issued shares on Nasdaq, with its market capitalization soaring to around $20 billion,
placing it in the ranks of the largest financial institutions in Brazil, and with its executives,
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including Silveira, profiting handsomely from its debut on the U.S. markets. Yet, XP, Inc.’s
splash in the U.S. obscures broken promises and fraudulent misrepresentations regarding its
access to key technology.
7. To his detriment, Kim did not know, and had no reason to believe, that, contrary
to what Silveira told him, XPI entirely lacked access to a basic execution platform on which
HUBL would be built, as well as the IT infrastructure necessary to support HUBL’s
development. This lack alone, without any further wrongdoing on XPI’s part, would have
severely compromised the development of HUBL.
8. Yet XPI wronged Kim further by torpedoing the development of HUBL
altogether. Indeed, in breach of its contractual promises to Kim, XPI failed to invest any funds
to develop HUBL. Then, in January 2020, XPI’s parent announced its intention to sell off
multiple divisions of its U.S. arm, and effectively shut down Kim’s desk – dooming any chances
of HUBL being developed in the foreseeable future.
9. Most recently, after an outraged Kim complained about his mistreatment and
announced his intention to file this Complaint by the deadline of February 27, 2020, XPI reacted
in a predictably bullying manner: firing Kim “for cause” without any justification on February
27, 2020 – the deadline set by Kim – thereby triggering its right to demand that he repay a part of
his sign-on bonus, and cutting off Kim’s access to any further income due under the Agreement.
10. In the wake of these broken promises, false assurances, and a vindictive, bad-faith
“termination”, Kim has been left severely damaged, with HUBL unrealized, lucrative
employment opportunities passed up, and his reputation and career compromised.
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PARTIES
11. Plaintiff Bruce Kim is and was at all relevant times, an individual and resident of
the State of New York.
12. Defendant XP Securities LLC, n/k/a XP Investments US, LLC (“XPI”), is and
was at all relevant times a Delaware LLC with offices in Miami, Florida and New York, New
York.
13. XPI is wholly owned by Defendant XP Investimentos S.A. (“XP S.A.”), a
Brazilian non-operating holding company that is in turn wholly owned by XP, Inc., its corporate
parent, a Cayman Islands company headquartered in São Paulo, Brazil. XPI and XP S.A. are
collectively referred to herein as the “Corporate Defendants”.
14. XPI is part of the XP group of companies, subsidiaries of XP S.A. and, in turn, of
XP, Inc. (collectively, “XP”).
15. XPI’s key businesses include providing securities brokerage services for
institutional and retail investors and interdealer brokerage services for institutional traders.
16. Defendant Pedro Henrique Cristoforo da Silveira is and was at all relevant times,
an individual and resident of the State of New York and of São Paulo, Brazil, and a high-ranking
executive at XPI and XP S.A.
17. XP has achieved phenomenal success in less than twenty years of existence,
having been founded in Brazil by its current CEO, Guilherme Benchimol.
18. Benchimol founded the company in 2001 at age 24, reportedly after being fired
from his job, at first operating it only as a stock brokerage. According to press reports, in 2008,
after Benchimol attended a Charles Schwab Corp. event in San Francisco, he became inspired to
create “the first real one-stop investment shop” in Brazil, catering to the financial needs of
ordinary Brazilians.
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19. Since that time, XP’s Brazil business has grown by leaps and bounds, the
company has expanded to the U.S., and has attracted important investors, including the private
equity firm General Atlantic LLC and Itaú Unibanco, the largest bank by market capitalization in
Latin America. Most recently, in December 2019, in what was described by some as the “hottest
IPO of the decade,” XP, Inc. floated its stock on Nasdaq. XP now counts over 2,000 employees
and it is Brazil’s largest brokerage by equity-trading volume. Benchimol, who was reportedly
nearly bankrupt when he started the firm, is now a billionaire and one of Brazil’s richest people.
20. Despite joining the ranks of the financial establishment, XP continues to tout its
grassroots appeal, claiming that its mission remains to offer middle-class investors products that
were once available only to the rich. In press interviews, Benchimol states that his goal is to
“completely transform the Brazilian financial system and improve people’s lives.”
21. But as Bruce Kim learned to his misfortune, XP’s sharp business practices stand
at odds with its mission statements.
FACTS
Kim Develops the HUBL Technology Concept and Seeks a Partner to Develop It
22. Bruce Kim is a veteran of the Forex trading community, having worked in the
industry since 1996. From 2000 to 2017, he worked at the U.S. office of ICAP, a London-based,
London Stock Exchange-listed global firm of professional intermediaries providing, among other
things, foreign exchange brokerage services. At ICAP, Kim grew to become head of the Asia
foreign exchange desk for the Americas, building it into a multi-million dollar business. Kim’s
involvement in a number of e-commerce projects in the latter years of his tenure at ICAP is
particularly regarded as significant and noteworthy.
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23. As brokers, Kim’s desk facilitated Forex transactions between banks. The growth
and success of the desk was due in significant part to Kim’s successful development of myriad
relationships with key institutional players. On the technology front, Kim made significant,
direct contributions to the successful deployment of an electronic hybrid trading platform on the
Asia Forex desks in London and the U.S.
24. Separately, Kim developed the concepts behind a technology that subsequently
came to be called “HUBL.” Conceptually complex, HUBL is a multilateral trading platform
built for the benefit of institutional clients. Utilizing basic matching and sorting algorithms,
coupled with a unique graphic user-interface, HUBL greatly enhances the Forex trading
experience. Kim hoped to profit off HUBL by charging clients fees to use the platform.
25. In 2016, Kim decided to seek an employer or partner willing to help him develop
HUBL. One firm that expressed strong interest in hiring Kim and developing HUBL was a well-
established institution with New York offices, which provides, like ICAP, brokerage and trade
execution services. By the spring of 2017, Kim had secured a lucrative job offer from this firm,
which included a multi-million dollar signing bonus, a contractual promise to develop HUBL,
and a promise that Kim would be entitled to a share of revenues and/or profits generated by
HUBL.
XPI Becomes Interested in Kim and HUBL
26. At around this time, XP S.A. announced its intention to float its shares on the B3
stock exchange in São Paulo. After reading some articles, Kim became intrigued by XP’s rapid
rise from startup to Latin American powerhouse, and its mission to bring market investing to the
wider Brazilian public. Kim had the idea that an innovative, young company like XP, looking to
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make its mark in the U.S., may have an even greater interest in developing HUBL than other
established players.
27. After Defendant Pedro Henrique Cristoforo da Silveira, a Controlling Partner and
Head of Off-Shore Businesses at XPI and XP S.A., expressed his readiness to meet with Kim, a
meeting was arranged between the two.
Silveira Meets with Kim at Sushi Seki in May 2017
28. Soon after making contact with Kim, Silveira met him in May 2017 at the Sushi
Seki restaurant near Times Square, with the meeting lasting about two hours. The meeting at
Sushi Seki was the first of several meetings held between Kim and Silveira over the course of the
next two months, culminating in XPI’s retention of Kim.
29. To Kim, at Sushi Seki and after, Silveira projected the image of a young,
knowledgeable, ambitious, barrier-breaking executive, in line with what Kim had read about XP.
30. For his part, Silveira could not disguise XP’s obvious interest, indeed eagerness,
to hire Kim. As Silveira told Kim, the firm was building up its U.S. operations, and while it had
deep institutional connections in Latin America, it lacked a proper footing in the off-shore IDB
(inter-dealer bank) space, other than its Brazilian Forex desk. In order for XPI to gain broader
market exposure, and do so with speed and scale, two things were needed: broker talent and
technology. As Silveira understood, Kim brought talent and technological expertise to the table.
31. Kim was attractive to XPI not only for his years and depth of experience, but also
because of his relationships with major Forex institutional clients and with other brokers and
traders. There was another reason for XPI’s expressed interest: Kim’s experience, expertise, and
leadership in developing a hybrid Forex trading platform for ICAP, in particular for its Asia
Forex desks.
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32. And, as was revealed during their meetings, Kim became even more attractive to
XPI and Silveira once he revealed the ideas behind HUBL.
33. Kim explained to Silveira at their Sushi Seki meeting that he was not interested in
being hired as a mere Forex broker. Kim told Silveira that he sought to partner with an
established and innovative firm like XPI that would provide Kim with the necessary
infrastructure to build multi-asset class, technology-based IDB operations in New York and
abroad. As part of this deal, Kim told Silveira that he sought to create a holding company in
which XPI would become a minority equity owner. That company’s primary asset would be the
HUBL technology, which Kim would develop and own.
34. Silveira appeared genuinely intrigued by HUBL, after Kim explained to him its
essential value proposition.
35. In connection with HUBL, Kim posed several pointed questions to Silveira.
Specifically, as Kim told Silveira at Sushi Seki (and many times afterward), for the development
of HUBL, Kim required three things: a) a central limit order book (CLOB) -- an underlying
technology without which HUBL could not even be entertained; b) IT staff and resources to aid
in the development and servicing of HUBL; and c) a commitment by XPI to fund HUBL’s
development. Over the course of several meetings with Kim, Silveira promised all three things,
and reiterated these promises many times.
36. CLOB is an order management system where market participants submit limit
orders (i.e., a direction given to a broker to buy or sell a security at a specified price or better),
which are stored in a queue based on predefined rules. Unless cancelled beforehand, limit orders
are then executed against matching incoming market orders.
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37. To prepare a CLOB that is production-ready and commercially viable is a
complex and expensive proposition. While there are basic CLOB systems on the market
available for purchase by firms, such systems cannot be implemented or used without additional
custom-coding workload. The workload necessary to fit the needs of specific purpose and
products is almost always substantial, both in terms of cost and in terms of time.
38. At the Sushi Seki meeting, Silveira avoided directly responding to Kim’s
questions, preferring to keep the discussion at this initial meeting high-level, and eschewing
specifics, but did mention, without elaborating, that XPI’s IDB trading platform (which included,
presumably, a CLOB, among other components) was not yet in operation, but was being
prepared to go live. Though light on details, the meeting was marked by a positive tone and by
Silveira’s charm, leaving Kim impressed, optimistic, and looking forward to future, more
substantive discussions.
39. Having no reason to doubt Silveira’s interest in his candidacy, Kim further
revealed at Sushi Seki that he had a competing job offer, reached after six months of negotiation,
as well as the terms of that offer. Realizing that Kim had every reason to accept the attractive
competing offer, Silveira asked Kim about the length of time XPI had to reach a deal with Kim.
To this, Kim – who did not want to jeopardize his outstanding offer in the meantime – replied
that XPI had two months. Silveira’s response was, in good salesman fashion, theatrical yet
credible-sounding: he said, firmly, “we’ll get it done,” and to demonstrate how nimble decision-
making was at XPI and XP, proceeded to send text messages to XP’s senior executive(s) in front
of Kim.
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40. Though Kim did not know, or have reason to know, at the time, Silveira’s
commitment to “getting the deal done” in record time meant that nothing was spared – including
the truth. To attract Kim to XPI, Silveira resorted to deception and fraud.
Silveira Has a Second Meeting with Kim at The Standard Hotel
41. In keeping with Silveira’s avowed commitment to speedy decision-making, Kim
and Silveira met shortly after, also in May 2017, over breakfast at The Standard, a hotel in the
Meatpacking District of Manhattan. This time, Silveira came armed with answers to Kim’s
questions posed at Sushi Seki, including questions regarding XPI’s technology and willingness
to create a holding company for HUBL. Silveira’s answers were designed to induce Kim to join
XPI – with no regard for the truth.
42. At The Standard, Silveira assured Kim that, while XPI’s overall IDB platform
was not yet live, that platform’s key component – the CLOB – was close to functioning.
Specifically, Silveira – as employee and agent of the Corporate Defendants, and acting within the
scope of his authority as employee and agent of the Corporate Defendants – stated that XP (and
by extension, XPI), as of that time, already had a proprietary CLOB in an advanced development
phase in São Paulo.
43. Further, Silveira – as employee and agent of the Corporate Defendants, and acting
within the scope of his authority as employee and agent of the Corporate Defendants – assured
Kim that XPI had access to XP’s extensive IT staff and resources in São Paulo, and that XPI
would be ready to commit all necessary funds to HUBL’s development.
44. Kim had no reason to disbelieve Silveira. After all, XP, the “Charles Schwab of
Brazil,” was a major financial company, with existing Forex trading operations, and with a big
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presence in Latin America. And Silveira appeared knowledgeable and sophisticated about
markets, and was familiar with the CLOB concept.
45. In addition, Silveira rejected Kim’s proposal for the formation of a holding
company for HUBL. Explicitly referring to Kim’s outstanding job offer, Silveira also refused to
match Kim’s multi-million dollar signing bonus. Instead, Silveira proposed that Kim become an
employee of XPI on certain alternative terms.
46. First, in place of a holding company for HUBL, Silveira offered Kim a “creative”
arrangement developed with input from Carlos Ferreira, XP S.A.’s Head of Institutional Sales,
which seemed to offer a reasonable alternative to Kim assuming immediate, outright ownership
of HUBL – namely, a share of revenues from clients’ use of the HUBL technology, with certain
revenue percentages keyed to the year of Kim’s employment at XPI, which was contemplated to
last for 15 years.
47. Second, in return for Kim accepting less upfront pay, Silveira stated that XPI
would, single-handedly, commit to funding the development of HUBL into a usable platform.
48. Third, Silveira offered Kim the option to buy out HUBL at year four of his
employment, using agreed-to valuation metrics.
49. Finally, Silveira offered Kim certain shares of XP in lieu of a multi-million dollar
sign-on bonus, subject to XP’s right to buy back those shares at a fraction of their market value.
When Kim raised concerns about the possibility of XP buying back his shares at potentially
below-market prices, Silveira dismissed the likelihood of a buy-back event that would result in
significant reduction in Kim’s total compensation, asking Kim rhetorically “why do you care?!”
and telling Kim that “we will build [HUBL], and you will be employed here for 15 years, so we
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will never buy back the shares.” Silveira’s assurance was clear: HUBL’s success would profit
Kim and his employer, and would ensure Kim’s long tenure at XPI as an equity partner.
50. This structure appealed to Kim, as it assured both him and XPI “skin in the
game,” and represented a meritocratic approach that accorded with his sense of fairness: HUBL’s
success meant greater reward for Kim, both from the revenue share, and from appreciation in the
value of certain XP stock in the long run.
51. Silveira knew that HUBL’s successful implementation was incredibly important
to Kim, both in terms of income and in terms of career growth. Thus, at the meeting held at The
Standard, Silveira assured Kim, as employee and agent of the Corporate Defendants, and acting
within the scope of his authority as employee and agent of the Corporate Defendants, that: a)
XPI had access to a CLOB in an advanced development phase in São Paulo, without which the
development of HUBL could not be entertained; b) XPI had access to extensive IT staff and
resources in São Paulo to aid in the development and servicing of HUBL; and c) XPI would
commit all necessary funds to HUBL’s development.
Kim Agrees to Join XPI on the Strength of Silveira’s Assurances
52. After further meetings between the two took place, Kim and Silveira met in mid-
June 2017 at the Walker Hotel in Manhattan. At that meeting, the two shook hands on the basic
terms of their deal, which were later encapsulated in a formal employment agreement.
53. Silveira, for his part, was thrilled at the prospect of developing XPI’s Asia Forex
desk, implementing new technology at XPI, and by the general prospect of retaining a
professional as reputable, accomplished, and well-connected as Kim.
54. To further cement the deal terms reached, on June 22, 2017, XP flew Kim to its
annual “Expert” convention, held at a massive convention center in São Paulo, which was a
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major gathering of Brazilian finance professionals, journalists, and other prominent people. XP
arranged for this to be a quick, one-day trip, dedicated mostly to the convention.
55. Kim spent less than 48 hours in São Paulo, with much of the time spent at the
convention. Amidst the festive atmosphere put up by XP, and with his itinerary set and
controlled by XP, Kim had no time or opportunity for serious substantive discussion with XP
regarding their operations.
56. Kim did spend a brief period of time at XP’s head offices, where Silveira
theatrically paraded him through a large, impressive-looking floor filled with IT staff, while
reaffirming XPI’s commitment to develop and service HUBL using such extensive resources, as
well as to fund its development. When Kim asked to see the CLOB, Silveira told him that all
relevant staff were at the convention, and that thus “there was nobody” at XP to demonstrate the
CLOB to Kim. Kim was then taken away to the convention center, where he spent most of his
time on this trip.
57. Kim had no reason to disbelieve Silveira. Indeed, XP’s offices appeared
impressive and well-staffed by IT professionals. And the experience of XP’s gargantuan
convention, including the conversations that Kim had with various Brazilians, all gushing over
XP, further convinced Kim that XP and, by extension, XPI, was the company it was made out to
be – a professional, innovative, cutting-edge operation, and certainly no risky startup.
58. On June 27, 2017, after he returned to New York, Kim received a text message
from XP’s CEO Benchimol, imploring him to join XPI, and further reminding him of XP’s
commitment to ensuring the right level of infrastructural support for Kim’s goals. Benchimol
wrote that he wanted to “100% assure you [Kim] [that] we are on the same page on the IT
investments necessar[y] to make XP be number one on the idb [inter-dealer bank] space!!”
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Conveying XP’s intense interest in Kim, and no doubt aware that Kim was entertaining an
attractive competing offer, Benchimol wrote that “[w]e need you . . . here to help us,”
encouraging Kim to “make even more history” by joining XPI.
59. Kim was induced to join XPI – induced by the promises to build HUBL, the
assurances that XPI had access to necessary IT infrastructure and technology, including most
importantly, a CLOB, and by XP’s reputation. So assuring and convincing were Silveira’s
promises, that Kim was willing to pass up employment at a more established firm that was
willing to offer him significantly more upfront compensation.
Kim Executes an Employment Agreement with XPI
60. On or about June 29, 2017, Kim executed an Employment Agreement with XPI
(the “Agreement”).
61. With the company expressing intense interest in hiring Kim, the negotiation of the
Agreement was handled at the highest level of XP, with XP General Counsel Fabrício Cunha de
Almeida drafting substantial portions of the document, and with Carlos Ferreira, XP S.A.’s Head
of Institutional Sales, making significant input into the Agreement’s terms.
62. The Agreement was to last for a five-year initial term, from February 2018
through February 2023, and was explicitly contemplated by all parties to be renewed after its
expiration for two additional five-year terms.
63. Under the Agreement’s paragraph 11, XPI could terminate Kim within any five-
year term only due to his death or for “Cause.” “Cause” was defined in paragraph 11(b)(i)-(v)
to include classic examples of gross misconduct, namely: i) “breach of fiduciary duty”,
“common law disloyalty”, and “deliberate dishonesty”; ii) “material breach or willful non-
performance of any material term” of the Agreement which has continued for more than 30 days
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following written notice to Kim; iii) “deliberate or grossly negligent unauthorized disclosure” of
confidential information; iv) Kim’s conviction of a felony; or v) “willful or gross serious
misconduct” in the “performance of [Kim’s] duties and responsibilities to [XPI], including by
conduct in disregard of [XPI’s] written rules or policies communicated to” Kim.
64. As for his compensation, among other things, the Agreement committed XPI to
paying Kim a base salary of $400,000 per year, plus a share of revenues from HUBL (termed in
the Agreement as “Magic Box,” but which later became known as HUBL).
65. Under paragraph 4(h) of the Agreement, Kim was also granted the right to
purchase all rights, interests and title to HUBL within 90 days prior to the fifth anniversary of the
Agreement’s effective date of February 2018, or in late 2022.
66. Crucially, the company agreed to pay for the costs of Magic Box/HUBL Version
1.0, including for costs of its “development, integration, installation and production-readiness.”
As for future versions of HUBL, XPI also agreed to fund those, agreeing to be “solely
responsible for all expenses related to maintenance[,] hybrid sales support, modifications, new
versions of Magic Box beyond MB Version 1.0, asset class scale workflow, and functional
modifications relating to Magic Box.” It was understood at all times by all parties that this
commitment was crucial, as without XPI’s financial and human resources, the development and
implementation of HUBL would be simply impossible.
Kim Joins XPI and Learns that – Contrary to What Was Promised –
XPI Lacks a CLOB or Access to XP’s IT Resources
67. Once Kim joined XPI, he started suspecting disturbing facts. Now that the deal
with Kim was signed, in informal conversations, Silveira became much more forthcoming about
the actual state of affairs at XP and XPI, dropping strong hints that XP did not, in fact, have in
place the CLOB platform that he had assured Kim it had.
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68. First, shortly after the Agreement was executed, Silveira informed Kim that XPI
did not, after all, have access to the IT resources of XP, Inc., which were for the use of the
Brazil-based business only.
69. Second, Silveira informed Kim that the CLOB allegedly in place at São Paulo was
not “proprietary” or in-house. Rather, Kim soon learned that it was a low-budget tinkering
project assigned by XP to Cedro Technologies (“Cedro”), an outside Brazilian firm of which
Kim had never heard. This revelation did not inspire confidence.
70. But what followed was even more damaging, as it all but confirmed that XPI
lacked access to a CLOB in an advanced development phase (as it was described by Silveira
before Kim’s execution of the Agreement), and that Silveira was fully aware of this fact.
71. Specifically, at around this time, shortly after the Agreement’s execution, Silveira
revealed to Kim that XPI was considering the purchase of a software company yet to be
identified or located by XPI that would carry a CLOB among its product offerings. While
Silveira intended this revelation to reassure Kim and impress him with XPI’s purchasing power,
it had the opposite effect.
72. All of a sudden, Kim started to realize that, if XPI was considering going so far as
to purchase some software company just for its CLOB infrastructure, then the CLOB allegedly
being developed by Cedro was not the CLOB in an advanced development phase that was
promised to him prior to the signing of the Agreement. And the fact that Silveira informed him
of such contemplated purchase revealed that Silveira was fully aware that whatever Cedro was
working on was not the CLOB that he had discussed with Kim prior to signing the Agreement.
73. Kim’s suspicions were unambiguously confirmed shortly after, when he again
visited XP’s São Paulo headquarters, this time for a more extended stay, and not in the context of
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a celebratory convention. During this visit, Kim learned what he had already begun to suspect –
XP simply did not have a CLOB that Silveira assured him it had before he entered into the
Agreement. That is, XP (and XPI) had no access to a proprietary CLOB in an advanced
development phase in São Paulo (or anywhere else).
74. Indeed, the “CLOB” demonstrated to Kim by XP and Cedro staff in São Paulo
was a basic, skeletal application that was certainly in no “advanced development phase,” and was
in no way, shape or form close to being commercially viable.
75. Kim was stunned by these revelations. It meant that the development of HUBL
and the revenues Kim reasonably expected to flow from that platform – his very reason for
taking a job at XPI – would be, at the very least, severely delayed. It also meant that XP was
nowhere near as sophisticated or advanced as he was lead to believe, and would have difficulty
in aiding Kim with the development or maintenance of HUBL. That XP lacked a CLOB
suggested that the company called the “Charles Schwab of Brazil” was, at least in the off-shore
IDB space, a struggling startup.
76. Had he known the truth about the technological infrastructure at XP or XPI, Kim
would never have accepted XPI’s offer of employment. Instead, he would have elected to accept
the lucrative job offer extended by XP’s established competitor.
77. Despite his sudden regret at having joined XPI, Kim did not consider himself free
to seek work elsewhere after this revelation. First, he felt bound by the Agreement, which had a
five-year term and did not permit him to terminate the relationship at-will. Second, Kim also felt
a sense of obligation toward his team at XPI, whose careers would be negatively affected by his
departure. Third, Kim’s sudden termination of his employment would reflect poorly on him in
the tight-knit world of Forex market and would have damaged his reputation.
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78. And finally, at this point, early in their relationship, Kim genuinely hoped that
XPI would fix its ways, would carry out its si