Chicago hedge fund Citadel may not have the best of luck when it comes to running traditional financial businesses (it's recent disastrous foray into advisory and capital markets - nuf said), but when it comes to picking up nickels and dimes ahead of slower traders (yes there is a name for it, but for lack of immediate legal retaliation by an uber-sensitive Ken Griffin we will leave it to our readers' imagination) by virtue of faster computers and a massive collocated infrastructure, Citadel is second to none (well, except maybe now infamous Latour Trading). Which explains why it is so sensitive to any former employees "borrowing" its special sauce, aka the computer code that is the only thing that gives the hedge fund its fro... er, superior trading execution. It was only last year that the fund went all Friend-O on Misha Malyshev, whose Teza technologies was implicated as the future employee of one now legendary Sergey Aleynikov. Well, it is time for a redux. As Dow Jones reports, "a former technology employee of hedge fund manager Ken Griffin's Citadel LLC was arrested for allegedly stealing sensitive computer trade secrets from the company for his own personal use, the Department of Justice said. According to the complaint affidavit, 24-year-old Yihao Pu, also known as "Ben Pu," was found by Citadel's information technology department to have "downloaded several unauthorized programs," which allegedly allowed him to bypass Citadel's security protocols and transfer files or data from his Citadel computer to an external storage device."
As for where this was found...
Certain files recovered from hard drives disposed in a sanitary canal near the Wilmette Harbor north of Chicago contained "alphas" or building blocks of Citadel's automated electronic trading algorithms and strategies. They also indicated that Pu was attempting to construct a trading strategy similar to the one used by Citadel, the affidavit said.
That's right: the sewer. That's how serious Citadel is when people go stealing their alpha shit: it will dig through.. well, you get the picture.
There was a time when being involved in finance meant lending and borrowing. Those days are gone. Now it is all about scalping milliseconds here and nanoseconds there.
And woe to whoever stands in the way of SkyNet.