U.S. Charges Ex-SocGen Man Over HFT Code Theft

Discussion in 'Professional Trading' started by ASusilovic, May 1, 2010.

  1. U.S. prosecutors charged a former Societe Generale trader on Monday with theft of a computer code used in high-frequency proprietary trading in the bank's New York office.

    Since the July arrest of a Goldman Sachs Group Inc programmer on similar charges, regulators and prosecutors have been examining the strategy in which trades happen in milliseconds.

    The former Societe Generale trader, Samarth Agrawal, 26, copied, printed and removed computer code from about June 12 last year to March 5, according to the criminal complaint filed in U.S. District Court in New York.

    An FBI agent, using a court-authorized "pen/trap" device that collects incoming and outgoing mobile phone calls, found that between March 16 and April 7, Agrawal made or received 115 calls from six large financial firms, according to the complaint. The firms were not identified.

    Agrawal "without authorization copied, printed and removed from the offices of a financial institution proprietary computer code for the financial institution's high frequency trading business, with the intent to use that code for the economic benefit of himself and others," the FBI agent wrote.

    Agrawal resigned from the bank in November, according to the complaint. He had joined as an analyst in the high-frequency trading group in March 2007 and was promoted to trader in April 2009.

    High-frequency trading has become an important business for some of Wall Street's banks generating millions of dollars in profits each year.

    FBI agents arrested Agrawal, a citizen of India, on Monday on the charge of theft of trade secrets, according to a spokeswoman for the Manhattan U.S. attorney.

    At his initial court appearance, he was ordered held until a Thursday bail hearing,

    Societe Generale said in a statement that it discovered the apparent theft.

    "Societe Generale conducted an internal investigation and discovered the apparent misappropriation of confidential computer code developed and used by the firm in its high-frequency proprietary trading operation in New York," spokesman Jim Galvin said in a statement.

    "SG promptly informed federal law enforcement authorities and has been cooperating fully with the investigation. No client information or funds were involved in the incident."

    Agrawal's lawyer declined to comment.

    The case echoes the charge against former Goldman Sach's computer programmer Sergey Aleynikov, who worked at the investment bank from May 2007 to June 2009. He was indicted in February with illegally transferring and downloading "hundreds of thousands of lines of source code for Goldman's high-frequency trading system" on his last day at the firm.

    The case is: USA v Samarth Agrawal, U.S. District Court for the Southern District of New York, No. 10-mag-779. (Reporting by Grant McCool, additional reporting by Jonathan Stempel, editing by Leslie Gevirtz)

    Copyright 2010 by Reuters. All rights reserved.


    Code theft seems to become som sort of "national sport"...
  2. I'm just curious how they got a wiretap on this guy. Talk about a police state. And the guy spoke about the code on the phone? Damn.