Goldman Sachs programmer's code theft conviction overturned

Goldman Sachs programmer's code theft conviction overturned

Summary: A former Goldman Sachs employee, accused of stealing data used in high-frequency trading, is to walk free after his conviction was overturned by an appeals court.

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A Goldman Sachs programmer who was convicted of stealing internal data has had his conviction overturned by an appeals court.

A Manhattan jury found Sergey Aleynikov guilty in December 2010 of stealing trade secrets. He was sentenced to 97 months in jail and was fined $12,500.

But yesterday, U.S. Court of Appeals for the Second Circuit ordered a judgement of acquittal. The reason will be disclosed "in due course", according to reports.

As ZDNet's Larry Dignan noted in July 2009, the one risk that Goldman Sachs did not count on was worker espionage. But Goldman now presumably has to find a new suspect now that the appeal went in Aleynikov's favour.

The Russian-born programmer worked for Goldman between May 2007 and June 2009, and developed during his employment programs to support high-frequency trading (HFT) on equity markets. He then quit the firm to develop a HFT platform for a Chicago-based startup.

HFT uses complex algorithms to engage in rapid trading to exploit the tiny price discrepancies in the markets. It can generate millions on a daily basis.

The conviction will also be a blow to the U.S. Department of Justice, which has made crimes of this nature a high priority.

Prosecutors claimed that "substantial portions" of Goldman's propriety computer code for its trading platform was transferred to a server in Germany. He reportedly copied tiny code fragments and emailed them to his personal email account on a daily basis.

Last month, federal authorities arrested Chinese computer programmer Bo Zhang in New York, on charges that he stole over $10 million worth of software from the Federal Reserve Bank in New York.

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Topic: Software Development

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5 comments
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  • What a world we live in

    I get sued for doing the obvious because of patents, but it's okay to steal code...
    happyharry_z
    • This is the "don't reinvent the wheel" principal at work

      @happyharry_z
      I've got hundreds and hundreds of code snippets I've written over the course of a 20+ year programming career. Most are fairly generic things that I use frequently, others are more specialized that I may never use. Every software developer I've ever worked with has their own code repository. Take a relatively simple task like writing to a text file from a SQL procedure. Sure, I could type that out by hand every single time I ever need to do it. But doesn't it make more sense to make a template that I can just copy and paste inline into new code that I'm writing or wrap into a stored procedure that I can just make a call to rather than writing it from scratch every single time I need to write to a text file from inside SQL code? If the code I'm making copies of doesn't infringe upon intellectual property rights (such as a custom algorithm like one used by a search engine), it isn't a crime. I'm guessing that the appeals court didn't find the code he was sending to himself to be of an IP infringing nature, or at least it couldn't be proven that it was.
      jasonp@...
  • Probably some evidentiary matter

    [ul][i]Goldman now presumably has to find a new suspect now that the appeal went in Aleynikov???s favour.[/i][/ul]Not at all. In the U.S., appeals courts do not re-try matters of fact; they only review procedure. "The reason," when it is finally disclosed, is almost certainly going to be something about the way he was caught: entrapment, an illegal tap on his phone... something like that.
    Robert Hahn
    • RE: Goldman Sachs programmer's code theft conviction overturned

      @Robert Hahn Or maybe he was just innocent?

      Btw. Love the way the US 'justice' department clicks its heels and salutes whenever the 'victim' is a big rich entity.
      radleym
      • That's not how it works

        [ul][i]Or maybe he was just innocent?[/i][/ul]We can't tell that from anything the appeals court said. What is known is that the bar is extremely high for an appeals court to say, "We reviewed all the testimony and conclude that the members of the jury were out of their minds." That happens so rarely that for all practical purposes the possibility can be dismissed. Appeals courts don't just overturn jury verdicts unless they find procedural error.
        Robert Hahn