Credibility of Government Witness Attacked in Goldman Sachs High-Speed Trading Trial

Discussion in 'Wall St. News' started by ASusilovic, Dec 5, 2010.

  1. MANHATTAN (CN) - Defense attorneys for the Sergey Aleynikov, the programmer accused of stealing Goldman Sachs' proprietary high-speed trading software, moved to strike the entire testimony of one of the government's expert witnesses, after he failed to identify a single line of source code submitted as evidence. U.S. District Judge Denise Cote denied the request, so Benjamin Van Vliet, an Illinois Institute of Technology professor, will return to the hot seat when court resumes Monday.
    For more than two hours, Van Vliet echoed the key arguments of the government's case against Aleynikov, who is accused of theft of trade secrets, transporting stolen property in foreign commerce and unauthorized computer access.
    Van Vliet testified that after inspecting a disc with more than 2,500 files of code, he confirmed that Aleynikov downloaded high-frequency trading software, which can give companies such as Goldman Sachs a competitive advantage by enabling them to place trades a fraction of a second faster than competitors.
    Based on his inspection, Van Vliet said, the code was a "hot rod, built for speed."
    A competitor getting Goldman Sach's proprietary software would be like a novice racer getting NASCAR star Jimmie Johnson's car, or a basketball team getting a clone of Patrick Ewing from the Knicks, Van Vliet told the jury.
    But when defense attorney Kevin Moreno asked how many of the 2,500 files on the disc he had inspected, Van Vliet replied that he saw about 50.
    Van Vliet had testified that he spent "a lot of time looking at" the disc, but under cross-examination he acknowledged that the phrase was "relative," and estimated that he examined the disc for a total of 20 hours.
    He received the disc last month, and the government first contacted him in September, Van Vliet said.
    Van Vliet said he does not have a degree in computer science, was never called in a trial before to analyze computer code, and could not "hazard a guess" on how many lines of code are contained in Goldman Sach's high-frequency trading code.
    When Moreno asked if any judge in a federal or state court "in the land" deemed him qualified to serve as an expert witness in computer code, Van Vliet paused, lowered his head, and said, "I lost my train of thought."
    During direct examination, Van Vliet testified that he could build a high-frequency trading system in "an afternoon."
    During cross examination, Moreno asked if that statement was a "joke," adding, "You have never built a high frequency trading system in your life, right?"
    Van Vliet replied that the system he programmed in an afternoon would not necessarily make any money, and most programmers working on such systems work on a team.

    Defense counsel tried to preclude Van Vliet's testimony before he took the stand.
    In a Nov. 24 motion, Aleynikov's attorneys wrote that Van Vliet had failed to explain how his "alleged knowledge and experience are reliably applied to the facts of the case," and claimed that his "proposed testimony ... contains nothing more than unsupported generalizations and unsubstantiated speculation."
    Before testifying in this trial, Van Vliet took the stand in the trial of Samarth Agrawal, who was convicted of stealing proprietary code that the French bank Société Générale used in its high-frequency trading.
    In that trial, U.S. District Judge Jed Rakoff expressed "deep skepticism" about portions of Van Vliet's testimony, a motion by Aleynikov's defense attorney maintains.
    During the Agrawal trial, Van Vliet testified that finance was a "science," to which Judge Rakoff replied, "The notion that this [Van Vliet's testimony] is science in any ordinary meaning of science is total baloney, utter baloney," according to the defense's motion.
    Although Rakoff did not bar Van Vliet's testimony, "the Court's frank characterization of Van Vliet's testimony as 'utter baloney' offered clear insight into how it regarded the testimony," the document states.
    Van Vliet's cross-examination was interrupted by the closing of the court day. Prosecutors said that the government expects to finish presenting its case on Wednesday.
    If convicted, Aleynikov could be sentenced to up to 25 years in prison.


    :D :D
  2. This is embarassing for me too. I own Benjamin Van Vliets book on trading systems!
  3. Van Vliet is an embarrassement for the HFT community...