Ex-Goldman Programmer indicted over HFT Code Theft

Discussion in 'Wall St. News' started by ASusilovic, Feb 12, 2010.

  1. NEW YORK (Reuters)—A former Goldman Sachs Group programmer was indicted on charges he stole computer code for the investment bank's high-frequency trading platform, federal prosecutors said on Thursday [Feb. 11].

    The former programmer, Sergey Aleynikov, 40, was arrested and charged in July Previous Reuters Story. The three-count indictment alleges that Mr. Aleynikov, who worked at Goldman from May 2007 to June 2009, illegally transferred and downloaded "hundreds of thousands of lines of source code for Goldman's high-frequency trading system" on his last day at the firm.

    Mr. Aleynikov, according to the indictment, then uploaded the source code onto a laptop computer that he took with him to a meeting in Chicago with his new employer, Teza Technologies LLC, a high-frequency trading start-up.

    Agents with the Federal Bureau of Investigation arrested Mr. Aleynikov at Newark Liberty International Airport upon his return from Chicago. He was held in custody over the July 4 holiday weekend before posting bail.

    Mr. Aleynikov's arrest is credited with shining a spotlight on the fast-growing business of high-frequency trading, a computer-driven strategy that is said to be responsible for more than half of the daily trading volume in U.S. stocks.

    According to the indictment, Goldman's high-frequency platform generates "many millions of dollars in profits per year." Goldman acquired some of the platform in 1999, when it paid $500 million for Hull Trading Co. and has since made major improvements to the system. In the indictment Mr. Aleynikov was specifically charged with one count of theft of trade secrets, one count of transportation of stolen property and one count of unauthorized computer access.

    "In today's information age, a theft of valuable intellectual property represents a serious breach of economic security," Manhattan U.S. Attorney Preet Bharara said in a statement.

    Mr. Aleynikov's lawyer, Sabrina Shroff, said she and her client were "very disappointed" by the prosecutor's decision to seek an indictment. But she said Mr. Aleynikov would be "vindicated" at trial.

    Ms. Shroff had asked prosecutors to consider a deferred prosecution agreement for her client.

    A Goldman spokesman declined to comment.

    No one from Teza, a trading firm started by several former Citadel Investment Group traders, was charged in the indictment.

    If convicted, Mr. Aleynikov faces up to 25 years in prison. He is set to be arraigned on the charges on Wednesday [Feb. 17].

    The case is US v Aleynikov, case No. 09-mj-01553, in U.S. District Court for the Southern District of New York.

  2. schizo


    Compared to how much GS stole from the American taxpayers, this is merely a pimple on your ass.
  3. spinn


    criminals really get pissed when you steal from them.
  4. Go figure. A dishonest guy in the securities industry. GS no less.

    You could knock me over with a feather.
  5. 25 years? Yet a guy who rapes someone only gets 6 months?
  6. The funny thing is if you bought one of their Quant Funds, it would still be down like 40% from its peak...

    So that code didn't hold much value, unless of course its already out there and people are trading against it..
  7. Really true... Surprised GSachs doesn't have him publicly executed in front of the Bull Sculpture on Wall Street...
  8. Why are you so surprised there are crooks on Wall Street? You work in that industry and you don't have an honest bone in your limp little body.