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Ex-Goldman HFT Programmer Sergey Aleynikov Indicted, Faces 25 Years In Prison

Tyler Durden's picture





 

Sergey Aleynikov, the former Goldman programmer, who was arrested by the FBI in July last year on virtually a day's notice after Goldman told the FBI the Russian had stolen secrets that could be used to manipulate markets, has just been indicted on charges he stole computer codes used for proprietary high-frequency trading programs. The specific charges include theft of trade secrets, transportation of stolen property in interstate and foreign commerce and unauthorized computer access. The charges carry a total jail time of 25 years.

As is now well-known, Aleynikov, shortly before his departure from Goldman, was hired by Misha Malyshev's Teza Technologies. The firm was founded after Malyshev left his former post as head of High Frequency Trading at Citadel. According to prosecutors, in July 2009 Sergey flew to Chicago and brought a laptop and another storage device containing Goldman's proprietary souce code to a meeting at Teza's office. Malyshev has denied any allegations that he has received Goldman's prop HFT code.

The indictment comes at a time when most observers had expected this case would be settled quietly, as the prevailing sense was the Goldman had no actionable case, especially after numerous months of court delays.

The question now is how much information will be made available for discovery, and how much will be filed under Seal so that no additional Goldman HFT secrets enter the public domain.

 


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Thu, 02/11/2010 - 16:59 | Link to Comment SteveNYC
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Yet Paulson, Bernanke, Geithner, Blankfein, Rubin, Friedman etc etc etc. all continue to walk free.

Worse still, it is implied that Goldman, being the honest custodians that they are, are using this technology for "fair" and "good" market practices??

 

Not fair.

Thu, 02/11/2010 - 21:37 | Link to Comment Problem Is
Problem Is's picture

"Not fair."

Sort of like the SEC ignoring massive insider trading at Citi before the stock collapsed... Rubin cleared $30.6 million on his stock sales, Prince $26.5 million, Druskin $32 million... shareholder lawsuit... SEC couldn't miss that if they were blind...

Instead they go after some analyst for an $800 trade...

Fri, 02/12/2010 - 07:39 | Link to Comment bonddude
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Who's next? Matt Taibbi?

Fri, 02/12/2010 - 09:57 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:02 | Link to Comment Orly
Orly's picture

I sure hope Sergey squeals all over the place.

Best of luck to you, sir.

Thu, 02/11/2010 - 17:03 | Link to Comment SilverIsKing
SilverIsKing's picture

Hope he gets a fair trial with a jury who understands how the game truly works.

Thu, 02/11/2010 - 17:15 | Link to Comment lizzy36
lizzy36's picture

seriously there is a better chance of tiger woods becoming a celibate priest then "getting a jury who understands how the game truly works".

Thu, 02/11/2010 - 17:59 | Link to Comment SilverIsKing
SilverIsKing's picture

Okay, maybe I over did it a bit.  How about, "getting a jury that can be taught enough about how the game works?"

Thu, 02/11/2010 - 21:40 | Link to Comment Problem Is
Problem Is's picture

If Sergey gets Shmucky Schumer, Mary Shapiro, C. Cox and C. Dodd on that jury... They will be too hopelessly stupid to understand the case...

Thu, 02/11/2010 - 17:04 | Link to Comment waterdog
waterdog's picture

This guy is a fool if he does not spill the beans. Tell The judge to go screw himself if he does not get a suspended sentence. This nut stole more information about Goldman than some hackable code. This guy knows how to steal. Before him, Goldman only dreamed of stealing. If this idiot goes to prison, the oligarchy will kill him before he meets his first lover of Greek heritage.

 

 

Thu, 02/11/2010 - 17:04 | Link to Comment earnyermoney
earnyermoney's picture

We'll see who has the stones to take on the criminal oligarchy in Russia.

Thu, 02/11/2010 - 17:59 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:09 | Link to Comment TraderMark
TraderMark's picture

Don't mess with Goldman Sachs.

Thu, 02/11/2010 - 18:00 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:10 | Link to Comment Simple
Simple's picture

nice scenario for a film ... f 0 ck goldman and brothers..

 

mfbwu

 

Thu, 02/11/2010 - 17:10 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:11 | Link to Comment carbonmutant
carbonmutant's picture

It's hard to imagine that they would want him on the stand... unless they have a gag order on the trial.

You know national security and all that...

Thu, 02/11/2010 - 18:01 | Link to Comment Anonymous
Thu, 02/11/2010 - 19:16 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:15 | Link to Comment Anonymous
Thu, 02/11/2010 - 21:46 | Link to Comment David449420
David449420's picture

Actually, what has not been disclosed is WHO made the decision to prosecute him. 

Seems to me that he could quite easily open the door to an in depth criminal investigation into Goldman Sax.

Maybe there are some principled actors still left in the judicial system.

Fri, 02/12/2010 - 02:39 | Link to Comment tom a taxpayer
tom a taxpayer's picture

I hope it does lead to a criminal investigation of Goldman Sachs. The prosecutor, the judge, or the press are possible sources to spark it.
Otherwise, what we have is the judicial system aiding and abetting Goldman Sachs ownership of stealth burglary tools.

Thu, 02/11/2010 - 17:17 | Link to Comment Anonymous
Thu, 02/11/2010 - 18:03 | Link to Comment Anonymous
Thu, 02/11/2010 - 19:00 | Link to Comment PenGun
PenGun's picture

BINGO! You win nothing ...mWhahaha.

Thu, 02/11/2010 - 17:34 | Link to Comment Anonymous
Thu, 02/11/2010 - 20:47 | Link to Comment Anonymous
Thu, 02/11/2010 - 21:49 | Link to Comment David449420
David449420's picture

Bringing this guy to trial may be the first step in getting the investigation started.

Fri, 02/12/2010 - 12:00 | Link to Comment tpberg7
tpberg7's picture

Divine intervention has kept him out of jail all of these years!  There are no rules when you are doing "Gods Work"

Thu, 02/11/2010 - 17:39 | Link to Comment JuicyTheAnimal
JuicyTheAnimal's picture

Like OMG, I just downloaded the code on BT Junkie.  I browsed through it and sure enough this algo is good.  With an account of only a hunred bucks it looks like I can now move the market 8% within hours...but only up.  I just need to get me a high power computer now.  Anyone got one I can rent? 

Thu, 02/11/2010 - 20:11 | Link to Comment Anonymous
Thu, 02/11/2010 - 17:39 | Link to Comment Anonymous
Thu, 02/11/2010 - 18:27 | Link to Comment cantstopselling (not verified)
Thu, 02/11/2010 - 23:12 | Link to Comment Problem Is
Problem Is's picture

"Angela Merkel Clanks When She Walks" ???

Upper right corner, Market Ticker??...

Thu, 02/11/2010 - 18:16 | Link to Comment Prof Gulliver
Prof Gulliver's picture

I can almost hear this on Goldman's PA system: "Paging Jack Ruby! Jack Ruby, please report to the courthouse."

Thu, 02/11/2010 - 21:39 | Link to Comment poor fella
poor fella's picture

Niiice! +3

He'll probably choke to death on a boiled pea or shank himself 100+ times in the face..

 >=ß

Thu, 02/11/2010 - 23:54 | Link to Comment arnoldsimage
arnoldsimage's picture

On June 11, 2006 The New York Times reported:June 10 — Three detainees being held at the United States military prison at Guantánamo Bay, Cuba, committed suicide early on Saturday, the first deaths of detainees to be reported at the military prison since it opened in early 2002, United States military officials said. The new study exposes how the NCIS report purports that all three prisoners on the prison's Alpha Block did the following to commit suicide: • Braided a noose by tearing up their sheets and/or clothing.
• Made mannequins of themselves so it would appear to the guards they were asleep in their cells.
• Hung sheets to block the view into the cells.
• Stuffed rags down their own throats well past a point which would have induced involuntary gagging.
• Tied their own feet together.
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• Hung the noose from the metal mesh of the cell wall and/or ceiling.
• Climbed up on to the sink, put the noose around their necks and release their weight, resulting in death by strangulation.

Thu, 02/11/2010 - 18:15 | Link to Comment buzzsaw99
buzzsaw99's picture

Put me on that jury. heh heh

Thu, 02/11/2010 - 20:36 | Link to Comment Anonymous
Thu, 02/11/2010 - 18:19 | Link to Comment Captain Willard
Captain Willard's picture

They have their own police force and criminal justice system now. Khalid Sheik Mohammed will get a fairer trial. He'd get less than 25 years had his laptop been full of blow.

Thu, 02/11/2010 - 18:23 | Link to Comment JohnKing
JohnKing's picture

Free Sergey!

Thu, 02/11/2010 - 18:32 | Link to Comment Anonymous
Thu, 02/11/2010 - 18:37 | Link to Comment Ripped Chunk
Ripped Chunk's picture

"arrested by the FBI in July last year on virtually a day's notice"

Thats a quick investigation for probable cause.....................

Fri, 02/12/2010 - 00:41 | Link to Comment JohnKing
JohnKing's picture

bah..this is about gov't sponsored enforcement of employment agreements. There was no investigation. The prosecutor and "investigators" need to be investigated on this one. I wonder how many programmers are still wanting to work at the squid.

Thu, 02/11/2010 - 22:06 | Link to Comment el Gallinazo
el Gallinazo's picture

Sergey will never get a fair trial in NY.  They will need a change of venue to Bogram, Afghanistan.

Thu, 02/11/2010 - 22:17 | Link to Comment Anonymous
Thu, 02/11/2010 - 22:33 | Link to Comment Anonymous
Thu, 02/11/2010 - 22:52 | Link to Comment Anonymous
Thu, 02/11/2010 - 23:16 | Link to Comment Anonymous
Thu, 02/11/2010 - 23:36 | Link to Comment Unscarred
Unscarred's picture

Paul Solman on PBS NEWSHOUR tonight examines whether Goldman is actually a hedge fund. Solman looks at the issue and practice of front-running and risk management at the investment bank.

Is Goldman just a Big Hedge Fund?

After arriving fashionably late, who else will join the party?

Fri, 02/12/2010 - 00:13 | Link to Comment Anonymous
Fri, 02/12/2010 - 01:07 | Link to Comment Anonymous
Fri, 02/12/2010 - 01:52 | Link to Comment Anonymous
Fri, 02/12/2010 - 10:11 | Link to Comment Hephasteus
Hephasteus's picture

The script kiddie who did this for goldman is going to go to jail if he tells other people how he did it. LOL

http://www.gata.org/node/8322

You can't be a superasshole today without supercomputers.

Fri, 02/12/2010 - 21:43 | Link to Comment Anonymous
Mon, 04/19/2010 - 10:05 | Link to Comment Tom123456
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