Reuters has the news on an Ex-Goldman Sachs programmer sentenced to 8 years in prison.
Ex-Goldman programmer gets 8 years for code theft
By Grant McCool
NEW YORK | Fri Mar 18, 2011 10:55pm EDT
(Reuters) - A former Goldman Sachs Group Inc (GS.N) computer programer was sentenced to eight years in prison on Friday for stealing secret code used in the Wall Street bank's valuable high-frequency trading system.
Sergey Aleynikov, was arrested by the FBI and charged in July 2009 with copying and removing trading code from Goldman before taking a new job at Teza Technologies LLC, a high-frequency trading startup firm in Chicago.
But, who would believe his statement?
"I very much regret the foolish thing of downloading information," theRussian-born father of three said at his sentencing on Friday. "Part of this information was proprietary to Goldman. I never meant to cause Goldman any harm or harm anyone at the bank."
He goes to Teza Technologies where his actions were traced.
But the strange thing is that even though Aleynikov was a software expert, (his credentials are impressive - Read Linkedin profile), the mistake he made was downloading so much source code to his home computer since his programming commands were recorded by Goldman's back-up systems, as reported by The New York Times (see below). The bank also noticed the surge in data moving from its servers.
This is what happened according to New York Times DealBook: "...just before he left (Goldman Sachs), according to the complaint, Mr. Aleynikov used his desktop computer at Goldman's New York offices to upload a stream of code to a Web site hosted by a server based in Germany. Later, he downloaded the files again to his home computer, his laptop computer and to a memory device."
The case sheds light on the secret world of high frequency trading, but also attests to the security precautions taken by investment banks. Meanwhile, ZeroHedge points out that Aleynikov was arrested the day after he joined Teza Technologies, co-founded by Misha Malyshev, a former head of high-frequency trading at hedge fund Citadel Investment Group LLC. (Teza was reportedly paying hin $1.4 million.) Aleynikov was suspended without pay and Teza is cooperating with the investigation, according to a Teza spokesman's statement, which also said the firm was not aware of alleged misconduct.The case sheds light on the secret world of high frequency trading, but also attests to the security precautions taken by investment banks.