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When Goldman Is OK With "Sharing" Trade Secrets

Tyler Durden's picture





 

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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Sat, 05/04/2013 - 14:13 | Link to Comment AlaricBalth
AlaricBalth's picture

Credit Suisse suing a new Goldman recruit who brought trade secrets with her. Gotta love corporate cannibalism!

Sat, 05/04/2013 - 14:41 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Why, why, why, why does this not surprise me...?  Nor bring a big smile to my face...  LOL!  Nice to see some bankers having to take their own medicine!

Sat, 05/04/2013 - 15:11 | Link to Comment LetThemEatRand
LetThemEatRand's picture

I doubt there will be anything approaching justice for this one.  GS will pay some lawyers for a while then quietly settle.   There will be no criminal prosecution.  She may lose her job, but even if so then more than likely she'll land on her feet somewhere else.  In the banking world, her only crime is that she got caught.  Someone at another firm will view her as resourceful and gutsy.  And next time she'll use a thumb drive.  

Sat, 05/04/2013 - 16:55 | Link to Comment James_Cole
James_Cole's picture

Speaking of the rule of law...... the whole point is in theory it only works when applied equally. So both Aleynikov and Pechi are in the wrong. Worth noting as well that Aleynikov stole source code which is VERY different than "preserving what they believe is their labor product over the years, including porting over their work, rolodex, emails and contacts"

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? 

Total straw-man and mischaracterization of 'copying one's work.'

Sat, 05/04/2013 - 17:00 | Link to Comment Black-Man
Black-Man's picture

They got software now to track thumb drives, too. If you are going to copy IP - you'd better hook it up to a server or another such computer that can't be scanned.

Sat, 05/04/2013 - 14:07 | Link to Comment fonzannoon
fonzannoon's picture

Agostina Peche from Universita Luca Brasi?

You could not pay me enough to prosecute her.  What's with the squid and all the paesans?

Sat, 05/04/2013 - 14:08 | Link to Comment Taint Boil
Taint Boil's picture

I'd nail it.

Sat, 05/04/2013 - 14:10 | Link to Comment fonzannoon
fonzannoon's picture

I would be scared of her father Joe. He is a little guy but after goodfella's we all know what little guys are capable of.

Sat, 05/04/2013 - 14:46 | Link to Comment freewolf7
freewolf7's picture

When you're in the mob, you don't f*ck with the mob.
If you do, don't sit in the front seat
on the way to "this thing we gotta do".

Sat, 05/04/2013 - 14:17 | Link to Comment AssFire
AssFire's picture

I don't know...something about her makes me think hers is as big as a horse's pussy. Maybe all that sleeping her way to the top? Then again, maybe it is just Derby day influencing my envisioning of her crotch.

Sat, 05/04/2013 - 14:32 | Link to Comment IdeasRbulletproof
IdeasRbulletproof's picture

Possibly a young Blythe in the making...

Sat, 05/04/2013 - 14:47 | Link to Comment TeamDepends
TeamDepends's picture

In Hollywood they call it the "casting couch".  What do they call it in the banking world, the "so you wanna be a playa" couch?

Sat, 05/04/2013 - 15:37 | Link to Comment ebworthen
ebworthen's picture

"Accounts Payable" couch.

Sat, 05/04/2013 - 14:43 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Taint Boil

Hey, why not?  "Pechi" in Italian is pronounced "peck-y" (as in Becky)!

Sat, 05/04/2013 - 14:59 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

I'd like to see Becky Quick star as herself in the XXX parody, Not CNBS!

Sat, 05/04/2013 - 14:10 | Link to Comment Bawneee Fwank
Bawneee Fwank's picture

Future Politician

Sat, 05/04/2013 - 14:13 | Link to Comment Silver_K-9
Silver_K-9's picture

Is she Mario Draghi's love child?! She has barely worked in a position over 2 years and now she's a VP?! #Gracie

Sat, 05/04/2013 - 14:18 | Link to Comment Aeternus
Aeternus's picture

Skiing at Chamonix in the French Alps, flying liesurely through the air in helicopters to the horse races in london, strolling to the strip clubs in the desert sand trap of vegas to snort blow and bang hookers. Perhaps a private lap dance at the lady marmalade party to finish the night. Just another day in the life for the legalized crooks.

 

http://www.youtube.com/watch?v=deuC8GPr31A

Sat, 05/04/2013 - 15:10 | Link to Comment reload
reload's picture

All this and more has been going on for decades, and it is not just a London phenomenon. When I left the market (having worked my way from being a pit trader on LIFFE to a desk in a bank where I was a market maker/book runner in IRS and other gov bond derived instruments) 20+ years ago this was ALL extremely common. In Paris it was 100% normal for a bank trader to go to lunch with one of his IDB brokers and recieve an envelope full of cash - a `commision rebate` they liked to call it. This was done without any attempt to hide what can only be described as theft from the banks shareholders. Senior traders would instruct juniors to trade not with the brokers who had the best price, but with the ones who offered the most generous rebate. In NY, buy side clients of the big bond trading/selling banks were treated to as many hookers and as much coke as they could stomach, and no doubt many a buy side client was significantly out of pocket as a result. In London I worked with one untallented and lazy `trader` who would go Christmas shopping with his brokers - i.e he would ensure they paid for the gifts on his shopping list.

So althhough this is absolutely not new (which does not make it OK at all) in my day it was the weak traders who struggled to make money or get noticed among smarter collegues who were prone to accepting or encouraging this type of bribery. They were not respected by their peer group in the marketplace and tended to blow out prettty quick, What is new (I think) is the depth of collusion deployed to manipulate an official rate, in this case LIBOR. There is something badly wrong when this can go on with what looks like official sanction inside many institutions - it is a long way from the days when a trader on the take would only be hurting himself and his employers.

The Brokers live for the next trade - and it always needs to be now. They always have and always will try anything they can to get bank traders beholden to them and to favour them with orders. For the most part the IDB type brokers are extremely unsophisticad people, right and wrong are not concepts they give much time to. They have truly awful jobs, for a crooked bank trader to entice them to assist in a manipulation scheme would be childs play - they all sold their souls long ago anyway. 

 

Sat, 05/04/2013 - 14:18 | Link to Comment toadold
toadold's picture

Let's me think, uhmm, niw how many Zero Hedge readers are surprised at the hypocrisy of the major tbtf banks?

Over at Instapundit there was a link to an interesting quote:

http://www.samizdata.net/2013/05/samizdata-quote-of-the-day-288/

It restates something that I've been noticing that when you are reading a lot of technical and scientific news you see interesting and promising developments. But when you read the political and economic news, and the two are even more intertwined than I've seen over the decades. It is pretty much all doom, gloom, and disgust at the politicians and their "pet" economists. To me this indicates things could be improved but it is starting to look like rope and tree limbs will be involved.

Sat, 05/04/2013 - 16:27 | Link to Comment nonclaim
nonclaim's picture

"rope and tree limbs" but in a different form: turn this special kind of thieves into public pinatas.

Bring your own bat to the party.

Sat, 05/04/2013 - 14:24 | Link to Comment Fuku Ben
Fuku Ben's picture

It is only unethical or illegal when the cost benefit analysis comes out value received < legal costs or someone is caught red handed and there is too high a political price to pay. Then a scapegoat will be sacrificed in order to maintain the integrity of the pyramid.

Sat, 05/04/2013 - 14:30 | Link to Comment Seize Mars
Seize Mars's picture

I'd hit that.*

*Seize Mars is nonviolent. The phrase indicated is a common colloquialism for "I find her attractive enough to consider her as a potential consensual sexual partner."

 

Sat, 05/04/2013 - 14:47 | Link to Comment skank
Sat, 05/04/2013 - 15:07 | Link to Comment ebworthen
ebworthen's picture

Bud's gun shop has surplus Police Smith and Wesson Model 10 .38 caliber revolvers for $279.

For some strange reason these are not legal in California (a six-shot .38 revolver?).

Anyways, the "Lavish Rewards" graphic made me nauseous, so...

http://www.budsgunshop.com/catalog/product_info.php/cPath/654_910/products_id/411545791/Used+Guns/Police+Trade+Ins

Sat, 05/04/2013 - 16:03 | Link to Comment seek
seek's picture

Cali has a BS "approved handgun list." Basically if the manufacturer doesn't submit and pay for testing, it's not on the list and can't be sold in CA. There are some interesting workarounds to this, but I doubt Bud's would want to screw with that.

Sat, 05/04/2013 - 16:50 | Link to Comment ebworthen
ebworthen's picture

Thanks.

How ridiculous - a 1970's era S&W six-shot revolver isn't "approved"?

Public safety?  BULLSHIT!

Sat, 05/04/2013 - 15:09 | Link to Comment malek
malek's picture

 those emails had been deleted and could not be recovered

I call bullshit - CS is displaying incompetence either of it's own IT department or of the writer of this crap who doesn't know jack about IT systems.

Sat, 05/04/2013 - 15:22 | Link to Comment negative rates
negative rates's picture

Don't sweat it, maybe he don't know Jack About It. ...I mean we already know he don't know Jack Shit.

Sat, 05/04/2013 - 15:28 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Jack Sheet, on the other hand, is a respected member of Zero Hedge.

Mon, 05/06/2013 - 00:20 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

2nd that motion

Sat, 05/04/2013 - 15:35 | Link to Comment vachon
vachon's picture

Hmm.  Work product being taken from the office, given to another employer, who eventually upgrades it and gives it to another employer,  blah blah blah.   Everybody does it. 

And they made a federal case out of Pirate Bay.

Sat, 05/04/2013 - 15:38 | Link to Comment ebworthen
ebworthen's picture

What happened to "honor amongst thieves"?

Sat, 05/04/2013 - 16:06 | Link to Comment buzzsaw99
buzzsaw99's picture

free sergey (again) bitchez

Sun, 05/05/2013 - 00:31 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Is he on a Suicide Watch?  He must feel such shame and be so depressed, after all.

Sat, 05/04/2013 - 16:40 | Link to Comment q99x2
q99x2's picture

I will live to see the day Loyd Blankfein is hunted down by nations.

Sat, 05/04/2013 - 21:10 | Link to Comment Joebloinvestor
Joebloinvestor's picture

I don't understand why they filed a suit instead of a criminal complaint.

Have her arrested for theft of company material.

Sun, 05/05/2013 - 00:34 | Link to Comment nathan1234
nathan1234's picture

 

Goldman, JPM et al need to be shut down- permanently.

How can one expect to get justice when the Attorney general of the US tells the Senate that they are too big to prosecute !

Thereby giving them the right to commit further and further frauds of bigger and bigger magnitude.

By allowing Holder to continue and not take action it appears that the administration is in cahoots with the crooked banksters.

The law is the same for all- individuals and corporates.

It's time the world recogonizes that the playing field of the bansksters in the West is to be shunned totally if they are to survive.

 

Sun, 05/05/2013 - 08:25 | Link to Comment resurger
resurger's picture

Next time just print them in A4

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