Goldman Rats Go After HFT Program Thief

I don't watch movies but if I did
maybe this picture would be appropriate?

I still can't believe Goldman actually admitted that they own a piece of technology that could be "dangerous" in the wrong hands. You bastards are slipping, you're supposed to act nonchalant about your devastating trading activities. Pfft. (Said Zero Hedge: "At least it is refreshing that none other than Goldman's own de facto attorney admits that the firm has created a piece of code that permits "market manipulation." So much win.)


A former Goldman Sachs Group programer was indicted on charges he stole computer code for the investment bank's high-frequency trading platform, federal prosecutors said on Thursday.

The former programer, Sergey Aleynikov, 40, was arrested and charged in July. The three-count indictment alleges that Aleynikov, who worked at Goldman from May 2007 to June 2009, illegally transferred and downloaded "hundreds of thousands of lines of source code for Goldman's high-frequency trading system" on his last day at the firm.

Aleynikov, according to the indictment, then uploaded the source code onto a laptop computer that he took with him to a meeting in Chicago with his new employer, Teza Technologies LLC, a high-frequency trading start-up.

Agents with the Federal Bureau of Investigation arrested Aleynikov at Newark Liberty International Airport upon his return from Chicago. He was held in custody over the July 4 holiday weekend before posting bail.

Aleynikov's arrest is credited with shining a spotlight on fast-growing business of high-frequency trading, a computer-driven strategy that is said to be responsible for more than half of the daily trading volume in U.S. stocks.

The indictment said Goldman's high-frequency platform generates "many millions of dollars in profits per year." Goldman acquired some of the platform in 1999, when it paid $500 million for Hull Trading Co and has since made major improvements to the system.

*cough* Let's channel Skeptical CPA (September 2009):

GSG [Goldman Sachs] is the "victim" here. Boil Aleynikov in oil, without trial. Two days later. See spot. See spot run. See FBI. See FBI run. McSwain, haven't you anything important to do? Like figure out what to arrest Lloyd Blankfein for? Or John Mack? Look, you'll likely find something. "Badly damaged"? Is damage an element of a crime? Or a tort? Facciponti seems confused. Why astonished Harvey? This is GSG, not Joe Schmoe complaining GSG defrauded him. GSG looks vulnerable. If GSG's program is 1,224 megabytes, what then? Federal Rule of Evidence (FRE) 106 states, "When a writing or recorded statement or part therof is introduced by a party, an adverse party may require the introduction at that time of any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it". Shroff, see "Dr. Strangelove" (1964) and mount a "doomsday" defense. Introduce all 1,224 megabytes. If I were Judge Crotty I would grant your motion. Let the jury inspect GSG's code. Why not? It's evidence. Soon the whole world will have it. Barney Frank may even look. GSG, you may have bitten off more than even you can chew here. No bail? Is Aleynikov a Cali drug cartel "capo", or Mullah Omar? Aleynikov, go to trial. Shroff, if you need money, start an Alenynikov defense fund. You might get more than you think.

So, GSG? Is the code evidence? If so, let's see what you're working with. Ooooh, dangerous Goldman Rat code, I'm shaking in my Pumas over here at the thought of it.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


OldSouth said...
This comment has been removed by the author.
OldSouth said...

Once the code itself becomes evidence, and a matter of widespread public discussion, I wonder whether this criminal case quietly goes away?

Rather like:

'Hey, that crook stole my inventory of mustard gas!'

''Scuze me, but what were you doing with your own private stash of mustard gas? That stuff is lethal to your neighbors.'

'That's irrelevant! It's MY mustard gas!'

'You certain you wish to prosecute this case, sir?'

Jest thinkin' out loud here....

Hahahaha OS! Did you ever see the Cops episode with the woman who flags down a cop car as if she's in trouble and the cop is all "what is the problem, ma'am?"

The woman, indignant, yells "that lady in there sold me fake crack! I gave her $10 and she gave me plaster! Arrest her!"

Buyer beware. In this case, Goldman must have the largest pair of balls in the history of humanity to have taken the case *this* far.


Anonymous said...

I saw commentary just this past week on the news from a former GS trader who said that GS makes very little of its money from traditional investment banking (a.k.a. "God's Work"). She said that the majority of their income is made front running their own clients - it is a hedge fund that masquerades as a traditional investment bank.

To use a movie reference - IMHO They (GS)are making the mistake that the younger generation of Corleones made after inheriting the empire - too much limelight, too much publicity. Vito would never approve of all this splashy front page news coverage and being so big a target on the radar. Jeff