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Ex-Goldman Sachs programmer gets eight years in prison for code theft

SearchFinancialSecurity.com Staff

A former computer programmer for Goldman Sachs & Co. was sentenced Friday to eight years in prison for stealing proprietary code from the company.

A Manhattan federal court jury found Sergey Aleynikov guilty of theft of trade secrets

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and interstate transportation of stolen property in December. U.S. District Judge Denise L. Cote sentenced Aleynikov on Friday to 97 months in prison and fined him $12,500.

Cote said during the sentencing that Aleynikov’s “conduct 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.”

Aleynikov worked for Goldman Sachs from May 2007 to June 2009 and was responsible for developing computer programs supporting the firm’s high-frequency trading on commodities and equities markets, according to court records. In April 2009, he resigned to take a job at a new Chicago-based company, Teza Technologies, where he was hired to develop that firm’s own high-frequency trading computer platform.

On his last day at Goldman Sachs, Aleynikov transferred “substantial portions of the firm’s proprietary computer code for its trading platform to an outside computer server in Germany,” prosecutors said. He encrypted the files and transferred them over the Internet, then deleted the program he used to encrypt them along with his computer's “bash history,” which records the most recent commands executed on his computer.

Aleynikov also transferred thousands of computer code filed related to Goldman Sachs’ trading program to his home computers, authorities said.

On July 2, 2009, he flew to Chicago to attend meetings at Teza’s offices, bringing with him his laptop computer and another storage device, each of which contained Goldman Sachs’ proprietary source code. Authorities arrested him the next day as he arrived at Newark Airport after that visit.

 “Protecting the proprietary information of America’s companies is critically important. Today’s sentence sends a clear message that professionals like Sergey Aleynikov who abuse their positions of trust to steal confidential business information from their employers will be prosecuted and punished,” Manhattan U.S. Attorney Preet Bharara said in a prepared statement.

 


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