Judge Unexpectedly Imprisons Ex-Goldman Programmer:
A federal judge has unexpectedly locked up the former Goldman Sachs programmer found guilty of stealing the investment bank’s computer code.
The Goldman executive, Sergey Aleynikov, had been on house arrest pending sentencing in a few weeks. But after the government warned he was a flight risk, Judge Denise L. Cote imprisoned Mr. Aleynikov, ruling that there was not “clear and convincing evidence” that he was not likely to flee the United States
He is set to be sentenced on March 18. The government is pushing for Mr. Aleynikov to serve between 8 and 10 years.
...
In December, a jury found Mr. Aleynikov guilty of stealing Goldman’s computer code for high-frequency trading when he left the bank to join a start-up in 2009. Prosecutors depicted Mr. Aleynikov, a Russian-born immigrant, as a brazen thief who uploaded thousands of lines of source code from the firm.
Mr. Marino, the lawyer for Mr. Aleynikov, called the government’s case “a silly prosecution” during the trial. He acknowledged that his client made a mistake in violating Goldman’s confidentiality policies, but insisted that he did not commit a federal crime.
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NYTimes, 2009/07/07
The Man Accused of Stealing Goldman’s Code :
But over five days in early June, the authorities say, he stole proprietary, “black box” computer programs that Goldman uses to make lucrative, rapid-fire trades in the financial markets. Their value, experts say, could be incalculable.
Mr. Aleynikov, however, will not get a chance to use those secrets. He was arrested by federal agents on Friday evening, as he got off a plane at Newark Liberty International Airport. He has pleaded not guilty to charges of theft of trade secrets and transporting them abroad.
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However, at a court appearance in Manhattan on July 4, Joseph Facciponti, the assistant United States attorney, told a federal judge that Mr. Aleynikov’s supposed theft posed a risk to United States financial markets and that other people may have had access to it, according to Bloomberg News.
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Mr. Facciponti said in the court, according to Bloomberg. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”
Court Transcript
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2011-03-18
NJ.com
Aleynikov has been sentenced to 8 years for the theft. ZeroHedge relevantly notes that, apart from Bernie Madoff, this is the longest sentence to be handed down to any financial professional involved in the crisis.
In the words of Joe Saluzzi from Themis Trading:
"Don't cross the the Vampire Squid."
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