When Goldman Is OK With "Sharing" Trade Secrets
When it is on the receiving end of course.
Several days ago we reported that Goldman's various judicial pawns would not rest for a minute until they made the life of the original "HFT code stealer" Russian algo trader Sergey Aleynikov, the 10th circle of hell for allegedly borrowing source code from Goldman in 2009 that could "manipulate markets" and which would be used at his subsequent employer, Teza. What we also said is that what Aleynikov did was a "practice engaged by every single algo and quant programmer when they switch jobs." What we did not say, because it is painfully obvious, is that Aleynikov's crime is nothing more than what virtually every financial professional does in the period of transition between jobs: while unethical, preserving what they believe is their labor product over the years, including porting over their work, rolodex, emails and contacts, is something done by roughly 99% of bankers who are are confident they are entitled to the portability of such information, and where the gray line between what is yours and what is your employer's, does not exist.
It also appears, while Goldman is willing to spend millions to prosecute a person for engaging in just such behavior, it has no scruples with being the receiving end of trade secrets coming from other firms. Such as Credit Suisse. Reuters reports that "Credit Suisse Group AG sued the former vice president of its emerging markets group on Friday, claiming she stole confidential documents and trade secrets to transfer business to her new employer, Goldman Sachs Group Inc."
In a complaint filed in Manhattan state court, Credit Suisse said Agostina Pechi sent confidential and highly sensitive company documents to her personal email account in the months leading up to her resignation, including databases, client contact information and sales team targets.
The Swiss bank also accused her of conducting an "after-hours document raid" when she was scheduled to be on vacation in which she allegedly copied transaction documents related to a longtime Credit Suisse client.
After Pechi resigned on April 2 and told the human resources department she was accepting a new position with rival Goldman Sachs, Credit Suisse launched an investigation into her departure and found 60 work emails in her personal account, according to the filing. The next day, those emails had been deleted and could not be recovered, the complaint said.
"Upon information and belief, Pechi intends to use confidential Credit Suisse information to compete with Credit Suisse, and intends to provide this information to her new employer to specifically target Credit Suisse's clients," the complaint said.
The young Ms. Pechi in question, barely six years out of university:
So it is this kind of "criminal" activity that banks have decided to unleash their lawyer hordes, just waiting to be summoned and paid $1000/hour?
Credit Suisse is seeking a temporary restraining order, barring Pechi for 30 days from seeking business from the company's clients. In addition, it asked the court to order Pechi to return all confidential Credit Suisse information and trade secrets.
Under her employment agreement, Pechi agreed to resolve any employment-related disputes in arbitration. In its court filing, Credit Suisse said it would pursue expedited mediation, and, if that fails, arbitration. But a court order was needed to prevent Credit Suisse from being harmed in the interim, the company said.
Apparently copying and pasting some emails, whose ultimate use will simply make the financial ladnscape more even, and end up benefitting the client (whichever firms they end up with), is a far more unethical, and illlegal, behavior in the banks' own eyes, than having the bulk of their workers pitching a client stoop to a level where coke, booze and prostitutes, all funded by clients, are the common currency in strengthening the quid pro quo bond between one sociopath and another? Recall:
the activities that bankers seem to spend the most time on, is treating their "preferred clients" with free gambling trips to Las Vegas, skiing in Chamonix, flying wives and girlfriends in helicopters, doing blow in industrial amounts, and, of course, cavorting with strippers and hookers. All paid for by some unwitting clients of course. It is this environment of utter and perfectly permitted, if not encouraged, debauchery that allowed scandals such as the Libor fixing "conspiracy" (first theory, then fact of course), to flourish, and which makes being a banker still the most desired job in the world.
So which is more unethical, one questions: copying one's work for future use, or using client money without the client's knowledge or approval, to fund Vegas trips, cocaine benders and brother trips for other, more important clients, in hopes of retaining their business? Oh yes, we forgot to mention that the second activity brings the potential of future bumper revenue. Which means, of course, that there is no contest.
But while the above distinction is meaningless, another question arises: we can only hope that Manhattan DA, Cyrus Vance Jr will prosecute young 20-some year old Agostina with the same passion that he has invested in destroying the life of Sergey. Or maybe a DA would scores less brownie points when going after an attractive, sympathetic young Italian female, than sicing his best prosecutors against a gaunt, bearded Russian with a thick accent?
And another final question: does anyone pretend there is still a thing called justice in the US, when money or career-promotion is involved, i.e., virtually all of the time?
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