The Cold War in high-frequency trading seems to have escalated overnight. July 9 (Bloomberg) â Citadel Investment Group LLC, the $12 billion hedge fund firm founded by Ken Griffin, sued three former executives and the firm they started, Teza Technologies LLC, over claims they violated non-competition agreements. âThis is a case of industrial espionage,â Citadel said in a complaint filed today in Illinois state court in Chicago. The firm seeks a court order barring the individual defendants from conducting any business through Teza or related entities that compete with Citadel, for the duration of the agreements. ⦠Thatâs the Teza LLC where Sergei Aleynikov was due to start work â right before he was arrested for allegedly stealing 32MB of Goldmanâs proprietary HFT code â a fact seemingly not lost on Citadelâs lawyers. Theyâre claiming that Aleynikov was due to receive a salary of $1.2m a year from Teza, and that the programmerâs alleged theft increases the possibility that Teza could be planning to steal Citadelâs own proprietary info. From Bloomberg again: âDefendantsâ activities, particularly Tezaâs decision to hire Aleynikov, an accused software thief, create a substantial risk that they have stolen, or may be planning to steal, Citadelâs proprietary code,â the fund manager said in its complaint. âIt had nothing to do with us,â [Teza Attorney Chris] Gair said of the Aleynikov case. He also said he had âno ideaâ whether the salary figure cited by Citadel was accurate. Chicago-based Teza, named after a river in western Russia, was co-founded by Misha Malyshev, Citadelâs former HFT head. Citadel is one of the top-players in HFT, claiming to account for up to 10 per cent of global equity volumes in a single day, according to a presentation on the technique made by the fund. For their part, the Teza execs say they didnât violate any non-compete agreements and are as yet a âformativeâ firm that havenât begun trading or investing. http://ftalphaville.ft.com/blog/2009/07/10/61361/the-cold-war-in-high-frequency-trading-turns-hot/