Home New York Press Releases 2010 Former Goldman Sachs Computer Programmer Found Guilty in Manhattan Federal Court of Theft of Trade Secrets...
Info
This is archived material from the Federal Bureau of Investigation (FBI) website. It may contain outdated information and links may no longer function.

Former Goldman Sachs Computer Programmer Found Guilty in Manhattan Federal Court of Theft of Trade Secrets

U.S. Attorney’s Office December 10, 2010
  • Southern District of New York (212) 637-2600

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that SERGEY ALEYNIKOV was found guilty today by a jury in Manhattan federal court of one count of theft of trade secrets and one count of transportation of stolen property in interstate and foreign commerce, in connection with the theft of proprietary computer code concerning a high-frequency trading platform from his former employer, Goldman Sachs. U.S. District Judge DENISE L. COTE presided over the two-week trial.

Manhattan U.S. Attorney PREET BHARARA said: "As today's guilty verdict demonstrates, we will use the full force of the federal law to prosecute those who steal valuable and proprietary information from their employers, whether those firms are on Wall Street or Main Street. The brazen theft of intellectual property by Sergey Aleynikov had the potential to cause serious harm to the company, and now he will pay for his crimes. We will continue working with our law enforcement partners to investigate and prosecute corrupt professionals who exploit their access to employer's secrets."

According to the documents previously filed in this case and the evidence introduced at trial :

From May 2007 to June 2009, ALEYNIKOV was employed at Goldman Sachs as a computer programmer responsible for developing computer programs supporting the firm's high-frequency trading on various commodities and equities markets. Goldman Sachs had obtained the high-frequency trading system in 1999, when it acquired Hull Trading Company, the previous owners of the system, for approximately $500 million. Since acquiring the system, Goldman Sachs modified and maintained the system, and took significant measures to protect the confidentiality of the system's computer programs, including firewalls to limit access to the firm's computer network, and limiting internal access to the high-frequency trading program. Goldman Sachs' high frequency trading system generates millions of dollars per year in profits for the firm. Goldman Sachs takes several measures to protect the system's source code, including requiring all Goldman employees to agree to a confidentiality agreement.

In April 2009, ALEYNIKOV resigned from Goldman Sachs and accepted a job at Teza Technologies ("Teza"), a newly-formed company in Chicago, Illinois. He was hired to develop Teza's own version of a computer platform that would allow Teza to engage in high-frequency trading. His last day of employment at Goldman Sachs was June 5, 2009.

Beginning at approximately 5:20 p.m. on June 5, 2009—his last day working at Goldman Sachs—ALEYNIKOV, from his desk at Goldman Sachs, transferred substantial portions of Goldman Sachs' proprietary computer code for its trading platform to an outside computer server in Germany. He encrypted the files and transferred them over the Internet without informing Goldman Sachs. After transferring the files, he deleted the program he used to encrypt the files and deleted his computer's "bash history," which records the most recent commands executed on his computer.

In addition, throughout his employment at Goldman Sachs, ALEYNIKOV transferred thousands of computer code files related to the firm's proprietary trading program from the firm's computers to his home computers, without the knowledge or authorization of Goldman Sachs. He did this by e-mailing the code files from his Goldman Sachs e-mail account to his personal e-mail account, and storing versions of the code files on his home computers, laptop computer, a flash drive, and other storage devices.

On July 2, 2009, ALEYNIKOV flew to Chicago, Illinois, to attend meetings at Teza's offices, bringing with him his laptop computer and another storage device, each of which contained Goldman Sachs's proprietary source code. He was arrested on July 3, 2009, as he arrived at Newark Airport following that visit.

ALEYNIKOV, 40, faces a maximum of 15 years in prison. He is scheduled to be sentenced on March 18, 2011.

Mr. BHARARA praised the investigative work of the FBI in this case.

This case is being handled by the Office's Complex Frauds Unit. Assistant U.S. Attorneys JOSEPH FACCIPONTI and REBECCA ROHR are in charge of the prosecution.

This content has been reproduced from its original source.