"Sign this NDA or we will send the FBI to arrest you because you found that our banking website's security was completely fucking broken and told us about it." Jesus fucking christ.
The researcher is lucky that TradeKing believed their NDA trick was sufficient. Even if the case here is weak, and I wouldn't necessarily assume it is, it would still seriously damage the researcher's life.
Here's how it goes when you get sued by a big company. Their lawyers essentially have a heyday doing everything possible to obstruct and delay the process so that they can maximize their time on the corporate teat. It will go on for years; they won't mind because it's business as usual for them, and they're getting paid big bucks to torment you. Your life will be ruined: assets seized pre-emptively, reputation and credit destroyed, inordinate quantities of time consumed by legal research and tedious paperwork, struggling (if not immediately blatantly failing) to keep your incompetent counsel paid at $250/hr and meet the retainer, and eventually failing to file some document or pay some fee that will cause the court to enter a default judgment against you and permanently confiscate everything you own, leaving you with the albatross of a massive outstanding judgment waiting to be enforced, bank accounts garnished any time you get any money, etc. And that's the short version!
And then guess what -- if, by some miracle, you don't lose in the first round, this whole process will repeat as they file appeal after appeal. Hunker down because the proceedings will last at least 5 years.
The corporate lawyers will be able to justify all of it to their clients without blinking an eye, who probably forgot that they even asked them to sue you. Everyone at the company and the law firm will go home and sleep soundly on their piles of money, and you'll have learnt your lesson that trying to stop the subterfuge of an online trading platform is a terrible offense.
Good reading: http://www.nissan.com/Lawsuit/The_Story.php
IANAL.
IANAL though.
Otherwise, in court I'll be happy to defend myself. If it is necessary to spend time to defend yourself then that is a blessing. I have successfully sued the government (the US Army and Veterans affairs, no less) http://www.gao.gov/docket/B-413723.2 when they do things wrong. Just be persistent and be right. Then we came out with a nice settlement. Sorry GAO used to publish fulltext docket outcomes but I don't see it here.
Fuck Nissan. (Can we curse here on HN?) Because their cars suck and because of this case that I am well aware of. The sad thing is that Mr. Nissan spent so much money in defense. I should hope that he would be able to be more effective with less money.
Companies that run formal bug bounty programs (either directly or through a third party like HackerOne) show some recognition of this and some goodwill, especially those that include payouts of five figures or more, but those companies have to be careful that they don't accidentally create an environment where bidding wars between exploiters and companies are legitimized.
Why not? Yes prices can become high, but isn't that the work of the researcher? If the company doesn't want to have to purchase expensive bounties, they can either reduce the exposure (less legacy code, fewer APIs, more firewalls) or use more strict security rules.
I'd feel safer if LastPass' bounty was higher than the value of the assets I put in that vault. If the value of a single vault (mine, actually) is $10,000 and the bug bounty is $2500 (which it is), how can we persuade discoverers to sell to LastPass?