Feeds

Goldman Sachs developer cleared of code theft

Coder freed after court rules against government

Next gen security for virtualised datacentres

A programmer who developed high-frequency trading code for financial powerhouse Goldman Sachs has won his appeal against an eight-year prison sentence, and been released from jail.

The 2nd US Circuit Court of Appeals ruled that Sergey Aleynikov, a naturalized US citizen from Russia, was not guilty of stealing computer code under the Economic Espionage Act (EEA). In an unusual step, the court ruled that he should be released from jail immediately.

“What’s unusual is that they ordered the immediate release,” Aleynikov’s lawyer Kevin Marino told The Register. “Usually this process takes weeks or months.”

He explained that the court appeared to have accepted the defense’s argument that Aleynikov was incorrectly charged. The EEA covers the theft of products for interstate and international commerce, but since Goldman Sachs was not selling its high-frequency trading system and, as such, it was not a good, ware, or merchandise that are covered in the legislation.

Marino said that it was possible that his client had violated a confidentiality agreement with Goldman Sachs, but that the government had resorted to the EEA law and was now left with little legal options other than appealing up the legal ladder. A Goldman Sachs spokesman told El Reg it had no comment on the matter.

Aleynikov worked for Goldman Sachs between 2007 and 2009, developing high-frequency trading software for the company – code that seeks to take advantage of small arbitrage opportunities in stock prices by placing millions of trades and then cancelling most of them as unprofitable. By piling in huge amounts of money into trades identified by the software as profitable, Goldman realized over $550m in profits, the case revealed.

But Aleynikov was approached by rival Teza Technologies, who wanted him to develop a similar platform for them. He uploaded code to a remote server in Germany shortly before leaving Goldman Sachs, encrypting the data and attempting to hide the transmission, but was arrested when Goldman alerted the authorities.

Aleynikov claimed that he thought he was only sending open source code from his employers, and that didn’t realize that any proprietary code was included. The court initially rejected his lawyer’s arguments and sent him to the Big House for eight years, as well as imposing a fine of $12,500 and ordering him to serve three years of supervised release. He has served nearly a year of his sentence, but is now a free man. ®

The essential guide to IT transformation

More from The Register

next story
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.