CBRE accuses former Retail Vice Chair of stealing secrets for new firm

21 March 2018 3 min. read
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Global professional services firm CBRE has leveled allegations of corporate theft at a former Vice Chairman of its Retail group. Richard Rizika, who was a member of CBRE’s headcount for more than 30 years, stands accused of stealing almost half a million files of proprietary information and trade secrets, which the firm believes he leveraged to form his own company in early 2018.

Richard Rizika had been a broker with the company for more than 28 years when he was elevated to the position of Vice Chair for CBRE’s global Retail wing in 2015. At the time, Rizika was highly regarded by the firm and its clients, having consistently ranked among the top retail real estate brokers globally, and being named to the Coldwell Colbert Circle for four years prior to his appointment.

Named after the firm’s co-founder, the Colbert Coldwell Circle is how CBRE honours its elite sales professionals. According to the firm’s site, “Those in the Circle are forged in the tradition of integrity, ethics and exceptional client service, all of which have become the company’s hallmark.”

CBRE has accused former Retail Vice Chair  Richard Rizika

Now, the firm is alleging the very opposite; that Rizika, and members of his team, abused their positions to download rent rolls, stacking plans, broker opinions, contracts, marketing plans and financial information, in order to start a competing company. The accusations come as part of a complaint filed by CBRE in federal court in Los Angeles.

In the case of CBRE vs. Rizika, the world’s largest commercial brokerage is set to claim that Rizika was planning his exit for months and started downloading information from the company’s password-protected database in June. The former executive is also accused of using his CBRE email to form a relationship with Placer Labs, which he later invested in, before using CBRE computers and software to perform research alongside the software firm, during work for Rizika’s new company, Beta Retail. Beta Retail and Placer Labs are also named in the lawsuit.

New firm

The day after he resigned, Rizika invited members of his CBRE retail sales team to his home where he gave a presentation of his new company and asked them to join, according to the complaint. Later, 13 CBRE employees left the firm to join Beta Retail. The core of Rizika’s group at the South Bay Retail Services team, Mitchell Hernandez and Alexander Saks Hernandez, were amid the exodus from the company.

In its complaint, CBRE claimed, “During the meeting, Rizika asked if they were ‘in’ and told the CBRE employees and salespeople to go ahead and give notice of their resignation to CBRE. He even offered them an opportunity to sign up for insurance with an insurance broker in the next room.”

In a statement after the complaint was lodged, CBRE spokesman Robert McGrath said, “This is a straightforward case of egregious business conduct in which Richard Rizika and Mitchell Hernandez orchestrated a concerted effort for their team to systematically steal approximately a half-million files of CBRE’s data. The entire business model for Rizika’s new company – Beta Retail Agency – is an exact replica of the existing systems.”

Rizika is yet to issue a comment on the lawsuit.

Despite the issues the set-back of Rizika’s exit, along with a number of his core team, CBRE still managed to maintain its stride in a business sense. The company’s commercial brokerage unit had more commercial deals in the US than any other brokerage in 2017. The firm is expecting robust growth
 in its UK and European operations too. To prepare for an uptick in business on the other side of the Atlantic, CBRE picked up former Royal Bank of Scotland Managing Director, Paul Coates, as an Executive Director and Head of Debt and Structured Finance for EMEA.