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March 19, 2011

Programmer sentenced to eight years for taking code from Goldman Sachs

Though some might hope that lots of people who once worked for Goldman Sachs would be facing prison, this New York Times story is about just the notable sentencing a former Goldman programmer.  Here are the details:

A former Goldman Sachs computer programmer convicted of stealing source code from the firm was sentenced on Friday to more than eight years in prison, capping a case that had shone a rare spotlight on the world of lightning-fast computer-driven trading.

A federal jury in Manhattan in December found the programmer, Sergey Aleynikov, guilty of stealing proprietary code that places trades using computer algorithms that spot tiny discrepancies in stock prices. Such trading earned Goldman about $300 million in 2009.

Before leaving Goldman for a new job at a start-up, Teza Technologies, federal prosecutors had claimed, Mr. Aleynikov secreted the code onto a server in Germany to get around the investment bank’s security systems.

The prison term, while at the low end of federal sentencing guidelines, was four times what probation officials had recommended. Prosecutors had asked for as much as 10 years.

Both the defense and the prosecution cited the recent case in Manhattan of Samarth Agrawal, a trader at Société Générale, who was convicted of stealing proprietary code from its high-frequency trading business. Mr. Agrawal was sentenced in February to three years in prison, less than the government’s request.

“It is unprecedented for the government to seek a sentence five times as high as probation recommends and for the court to impose a sentence four times as high,” said a defense attorney, Kevin H. Marino....

But Judge Denise L. Cote of the Federal District Court in Manhattan likened his crime to “economic espionage.” Mr. Aleynikov’s conduct, she said, “deserves a significant sentence because the scope of his theft was audacious — motivated solely by greed, and it was characterized by supreme disloyalty to his employer.”...

Mr. Aleynikov has been in jail since March 2, when the judge revoked his bail. The decision to incarcerate Mr. Aleynikov before his sentencing was prompted by a letter from federal prosecutors, who warned that Mr. Aleynikov had dual citizenship and posed a flight risk.

March 19, 2011 at 08:53 AM | Permalink

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Comments

hmm

"A federal jury in Manhattan in December found the programmer, Sergey Aleynikov, guilty of stealing proprietary code that places trades using computer algorithms that spot tiny discrepancies in stock prices. Such trading earned Goldman about $300 million in 2009."

So when are we going the see the arrest of the individuals in goldman for running the program in the first place. that 300 mil came out of someone's pockets!

Posted by: rodsmith | Mar 19, 2011 5:09:05 PM

Thanks for your share,thanks a lot.Good luck!

Posted by: Big pony | Apr 11, 2011 7:57:27 AM

HFT is program trading platform therefore it is easy to hack code from its software...Therefore programmers has to be very careful while deigning code of HfT..

Posted by: hft | Jan 30, 2012 11:30:40 PM

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