Sergey Aleynikov Suffers The Full Wrath Of A Vindictive US Judicial System

Tyler Durden's picture

'Commingle' hundreds of millions in client funds which are subsequently stolen rehypothecated as collateral by JPMorgan while your firm goes bankrupt as a result of your idiotic prop trading decisions, and what happens? Your toughest choice is whether to vacation in Fiji or St Barths. That said, being former CEO of the world's biggest TBTF hedge fund also known as Goldman, a former governor and senator, and most importantly bundler for the president of the "transparent" administration certainly helps. On the other hand, be a lowly algo trader and quant programmer working at the aforementioned hedge fund, and having dared to "steal" secret trading client code that can "manipulate markets" and what - you get the full wrath and anger of the FBI, the Federal Court System, and now the Supreme Court.

The story of former Goldman programmer Sergey Aleynikov is well known to frequent readers: he was one of the first algo traders to bring attention to the arcane field in the summer of 2009, when aside from a few 'fringe blogs', nobody had even heard of algorithmic trading or the HFT scourge that less than a year later would result in the Flash Crash (and countless mini and maxi flash crashes since). What was remarkable about Sergey's case, unlike that of say... Jon Corzine, is how quickly the law proceeded to throw the book at him and to see him wind up in jail.

How else: after all he dared to "steal" code (a practice engaged by every single algo and quant programmer when they switch jobs by the way, if perhaps a little less obviously) from Goldman Sachs itself. For that alone he must fry.

And sure enough, he will.

Because the last time we read about Sergey in February of 2012, a federal appeals court in new York overturned his sentence of corporate espionage that had been handed to him in December 2010 by a federal jury, on the grounds that federal espionage laws did not cover Aleynikov's alleged illegal activity.

But then last August, NY's new State Attorney General, Cyrus Vance Jr, still humiliated from the whole DSK affair, resurrected the case acaginst the Russian and charged Aleynikov with two felonies under New York state law, unlawful use of secret scientific material and unlawful duplication of computer related material.

Sure enough, Sergey's lawyers appealed again, only this time no such luck, even though the prior appeal was granted on virtually the same grounds.

Reuters reports:

In a decision made public on Tuesday, New York State Supreme Court Justice Ronald Zweibel said the former programmer, Sergey Aleynikov, did not show that the charges brought by Manhattan District Attorney Cyrus Vance Jr amounted to double jeopardy, or were part of a "vindictive prosecution" justifying dismissal.


Zweibel also rejected the argument that Aleynikov has been "punished enough," having already spent 11 months in prison during the federal proceedings and lost his home and savings, and that ending the case served the interest of justice.


Vance and U.S. Attorney Preet Bharara in Manhattan, who had earlier prosecuted Aleynikov, have made cracking down on computer crime and corporate espionage a top priority.


Zweibel said Aleynikov was not deprived of his right under the 5th Amendment of the U.S. Constitution not to be tried twice for the same offense.


He said this was because the federal and state charges were different, and because the federal case was dismissed because the indictment, rather than the evidence, was inadequate.


The judge also said there was no reason to presume that Vance had an improper motive in bringing his case.


"Even assuming, as defendant does, that the timing of this indictment, coupled with the defendant's successful appeal of his federal court conviction, raises an inference that the prosecution may have been motivated for vindictive reasons, these factors along do not create a presumption of vindictiveness," Zweibel wrote.

No, obviously Goldman's lackeys in the judicial system are not at all vindictive. After all why not just destroy the man who already lost his home and all his savings fighting the squid for the past four years for doing something that every other banker, trader and programmer does on a daily basis when they "back up" their work computer on a flash drive. Might as well let him fry: what's the downside at this point?

Well, fry is a little strong: "Aleynikov could face up to four years in prison if convicted."

What can one say after hearing of such valiant acts of justice to punish those who are truly responsible for the absolute economic collapse and the unprecedented crony capitalism and daylight robbery from the middle classes facilitated by every country's central monetary authority?

Why, "Free Corzine" of course! As if this country did not have enough innocently jailed people...

In the meantime, ladies and gentlemen, behold the face of a pure, unadulterated criminal- the mastermind behind the vaporization of MF Global's client accounts and the person solely responsible for making the US financial Ponzi scheme into a superglued house of cards to boot.

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Atomizer's picture

Gang Of Four aka (G4) hasn’t got back to the latest public servant Anthrax threats. Meanwhile, Janet is cracking down on her Hotel sexual discontinuity sources..


If you see something, say something.. Right Janet?


ACP's picture

Sorry Serge, not a member of the club!

DeadFred's picture

Darn lucky he hasn't suicided himself with two bullets to the back of the head, but there is still time.

Zer0head's picture

posted earlier

if you did not appreciate just how twisted things have become in America



Russia Returns Baby to American Parents

"court has returned a baby boy who was seized by authorities"

James_Cole's picture

What he actually did the court case itself are not QUITE how Tyler paints them...

ACP's picture

The point of this article is partly to point out the inequity of the current US justice system. I'm sure this wouldn't be as big an issue if members of "the club" got the same treatment as "non-members" like Serge.

Personally, I believe if you steal something valuable, you should pay the price, for which 4 years seems fair......IN A PERFECT WORLD.

Any sentence longer than ZERO under CURRENT circumstances is bullshit, as far as I'm concerned.

Sylvia Plath's picture

Corzined.......................... Bitchz!





........ don't let the squid hit you on the way out :)                Thank you come again!

Au_Ag_CuPbCu's picture

MF'd.......................... Bitchz!

marathonman's picture

Corzine is now an event.  A lot of Cypriots are now saying those SOB's Corzined my money!  Of course it goes without saying that Corzine should be hanged from a lamp post on Wall St. as an example.  AG Eric Holder is a complete douchebag and deserving of impeachment and jail time himself.  But a different kind of mafia runs this racket and for them Corzine is still useful.

NoDebt's picture

Look, he did something he shouldn't have.  He's gonna pay the price.  And I'm not swayed by arguments of "relative" justice.  What you're expressing is just the gut-level reaction to the real problem. 

The problem is the Jon Corzine effect (corruption).  You can't send the foot soldiers to jail and say the generals are all innocent with any level of credibility.  But that's what we're doing.  Nobody went to jail over..... anything that really matters.  Hell, we even sent some Enron guys to prison for that fiasco, but a complete collapse of the entire US financial system.... everyone's in the clear on that.  In fact, we encourage them to do it again.  Here's even MORE free money to help you along- have at it!

But if you want to have any chance of finding our way back to something like a fair and equitable system, you still have to punish the small offenders along the way, even if some of the big ones escape punishment (whether temporarily or permanently).  Throwing out rule of because you can't catch everyone in the net at the present time is a bad path to go down.  It might feel good for a while to cast aside the law in favor of some kind of "relative justice" but at the end of the day, dismissing rule of law HELPS the powerful and connected become even more powerful and more connected.


eatthebanksters's picture

Would someone just shoot that fucker Corzine?  A little cowboy justice to make us all feel better?

matrix2012's picture

The rambo justice will be a capital sin then...for it will set a good example for the muppets on how to deal with those unreachable Overloards out of courts, which must be a terrible nightmare for all in powers, in an amazing land whereas there are so many capital crimes pose no case at all.

fourchan's picture

jews walk all others pay.

Popo's picture

Uhm... Isn't Alyenikov Jewish though?

Popo's picture

If it was "just" code though, this wouldn't be a big deal.

The reason it's a big deal is that this code can manipulate markets. So he's being tarred and feathered with the "market manipulation" brush.

And not a single regulator is asking the more obvious question:

Why does Goldman have software that manipulates markets?

And consider this: If anyone were to make the claim that "Goldman manipulates markets", they'd be labeled a conspiracy theorist. And yet they're burying a man for making an unauthorized copy of code which does exactly that.

James_Cole's picture


If it was "just" code though, this wouldn't be a big deal.

The reason it's a big deal is that this code can manipulate markets. So he's being tarred and feathered with the "market manipulation" brush.


It's a totally separate issue, proprietary algorithms are difficult to protect and the laws are sort of a gray area. He knew this and took the code to another company. Anytime you work for a company whose commercial work involves this you'll be signing big legal agreements but it's tough to protect. 

GS is the worst company in the world blah blah blah but that doesn't change the fact that stealing work he was paid to be involved with - and taking it to another company - isn't exactly noble. 

And he got off the charge..

fourchan's picture

who is the real fucking theif the accuser or the accused? fuck goldman.

ExpendableOne's picture

Programmer here.  We ALL backup code we work on.  Nothing more terrifiying to a programmer than writing something clever only to have it lost to a server meltdown.  His problem with the squid is that he took the entire source tree and attempted to shop it to another company.  I personally think the trouble he's already been through is more than enough "punishment" though.  The courts have become bought and paid for assassins in this case and a couple of others (Reddit founder).

Lugnut's picture

Enron is one of the reasons these regulators are afraid to to go too hard on these TBTF banks. They saw 28,000 high paying jobs go up in smoke and went "well...shit, that wasn't good". Never mind the perps needed to go to prison. Its one thing when Enron goes boom, and quite another when one of the primary PDs does. I think thats why they get a get out of jail free card. Sucks ass. Corzine should definitely be doing a criminal charge perp walk.

BTW, I have no problem with Sergey going to the clink for trying to auction off the code. He should.

A Nanny Moose's picture

Any sentence longer than ZERO under CURRENT circumstances is bullshit, as far as I'm concerned.

Fucking eh! Free Sergey.

matrix2012's picture

Zer0head, you just misplaced the headline terribly wrong!


U.S. Returns Baby to Russian Parents


30 April 2013 | The Moscow Times


A California court has returned a baby boy who was seized by U.S. authorities from his Russian parents (Alex and Anna Nikolayev) in a case that prompted loud denunciations from Moscow.

"After five hours of deliberation and analysis of factual information presented by both sides, the judge decided to dismiss all charges against the parents," said Igor Shaktarola, a diplomat from the Russian consulate in San Francisco, Interfax reported.

The Sacramento court on Monday also cautioned the parents to follow all future medical advice and not take 5-month-old Sammy from any hospital without proper discharge papers.

Sammy Nikolayev had been in protective custody since April 24 when police and child protective services removed him from his parents' apartment amid a dispute with the baby's doctors over his treatment.

After Sammy was treated for flu symptoms, doctors as the Sutter Memorial Hospital in California decided that he needed an immediate heart surgery. The parents took the baby boy from the hospital for a second opinion without obtaining a proper discharge.

"We are aware Sammy's heart murmur and have consulted a cardiologist every two weeks," said the child's mother, Anna, Interfax reported. "No one ever gave any reason to think his health was in any imminent danger and there was a need for an emergency surgery."

The police and child protective services claimed "severe neglect" in their decision to take the baby.

At the moment, the baby is hospitalized for further treatment, but child protective services have authorized the parents to be with him, children's rights ombudsman Pavel Astakhov said on Twitter.

Astakhov also confirmed that the boy's parents are dual citizens of Russia and the U.S. He said the boy does not have Russian citizenship, a process that requires a special procedure and parental consent.

Sammy's case quickly gained widespread public attention and media coverage in both Russia and the U.S., with Astakhov lodging a fierce protest over what he described as U.S. interference into the rights of a Russian family.

################ highlighted the story yesterday, at which the couple testified among other on how facebook repeatedly shut down their pages because they were used to rally support on the couple's case...

What a scary land to live on....expect more when getting closer and closer to the complete fascism

espirit's picture

His name is Sergey Aleynikov.

samsara's picture

They didn't want to silence him.
They wanted to make an example.

Like whistle blowers

xtop23's picture

Exactly. They don't really give two squirts of piss about this guy. 

They're just giving a little demonstration for others.

smbc1066's picture

Haha! That is brilliant!

RafterManFMJ's picture

Steal from the crooks!? That's double-plus bad!

OutLookingIn's picture

"We hang the petty thieves and appoint the great ones to public office."

- Aesop

Scro's picture


Love the Ads

Aurora Ex Machina's picture

If you don't know that ads are targeted personally by now, you need to.


So, yeah, thanks for that insight into your sexual preferences and all, but you'd probably be better off keeping it on the QT.




<My ads have Squirrels in them!>

NidStyles's picture

I have no ads. I'm a ghost WWOOOOOoooooOOOOO!!!

espirit's picture

Albanian hookers, Ethiopian albino dwarves, Icelandic elves...

You know, the usual suspects.

knukles's picture

Last thing you want to complain about are the fucked up ads you get.
Betcha the same folks go out of their way to get carry permits and register their firearms in no register necessary domiciles.
And tell everybody about their PM stash they keep at home.  Which they bought on line with a credit caed.  In the garage.  On a shelf.  In the cutout red plastic gas can because nobody'd ever think to look there. 

James_Cole's picture

One thing that worries me - because I don't know if it's a co-incidence or not - I saw a movie the other night at theatres and there was an ad for some movie I've never heard of, never seen an ad for it, never looked it up. No famous looking actors in it, looks low budget.

Anyway, now I'm getting targeted ads for it constantly! It's the only movie I get ads for. I've never looked up anything about it... does Google know what movies I've seen and what was advertised at those movies?? Has google become psychic...self aware??

JimBowie1958's picture

Whatever movie (lets call it movie B) you went to see that had ads for movie A is a movie that the producers of movie A think is the same target demmographic as movie A.

Now you may not have ever looked for info on movie A but you have likely looked for stuff on movie B since you did go and see that one. The publicists for movie A are likely buying the data built up for movie B and you are on that list of folks interested in B so now you geet shit on A.

Hope that helps.

mofreedom's picture

not directly targeted...i've onle been with blondes and one red head by accident.  dark haired women, oh yea there was one, have big hairs growing out of their t's.

xtop23's picture

Hilarious. Thx for that.

Mine has Livestrong on it. Does that mean I get to nail Sheryl Crow?

pods's picture

Nope, one ball more.


xtop23's picture

Dammit, always a catch.

matrix2012's picture

what ads...which ads... i just see a very clean page here, only carrying texts, charts, pics and WB7 works 

must be missing the cutie Filipino cupid ;)

Jim in MN's picture

Great song by a great band.  Here is a rare early live clip.

'Damaged Goods' 1980

buzzsaw99's picture

jesus fucking christ it's hopeless

TotalCarp's picture

Yes it is. We talk so much here about corporate coruption on all levels but its the utter destruction of ny courts which have turned themselves into a vicious sham that is most troubling - and least obvious to general public

Pure Evil's picture

Ah, poor Sergey, Uber Villain.

Did he not think to abscond when he had the chance? Did he even have a chance?

Of course, the mere mundanes have to be excoriated to educate other mundanes their caste in American society.

And, the only transparency the Obama regime can highlight is that it is possible to be even more evil than the Bush regime.

Thomas's picture

Those fuckheads. If I got sent to jail like that, I would like to believe I still had enough spine to get even when I got out. If Goldman went down for the count, I would dance in the streets. Capitalism would be on the mend.