Ex-Goldman programmer pleads not guilty to theft

Sergey Aleynikov departs from federal court in New York February 17, 2010.

NEW YORK (Reuters) - A former Goldman Sachs Group Inc computer programer pleaded not guilty on Wednesday to charges he stole code from the bank's lucrative high-frequency trading platform before leaving for another company last year.

Sergey Aleynikov, 40, said only "not guilty" at his first appearance in Manhattan federal court following last Thursday's unsealing of an indictment that formalized charges initially brought last July.

Aleynikov, who is free on bail, is charged with theft of trade secrets, transportation of stolen property and unauthorized computer access. If convicted at trial, Aleynikov faces up to 25 years in prison.

According to the indictment, on his last day working for Goldman on June 5, 2009, prosecutors alleged Aleynikov transferred Goldman computer code for its trading platform to an outside computer server. They said he encrypted the files and transferred them over the Internet without informing Goldman Sachs.

U.S. prosecutors and the FBI alleged he emailed code files to his personal email account from a Goldman email account, storing versions of the code files on home computers, a laptop and other storage devices.

They said that, on July 2, he took the laptop and another storage device to a meeting in Chicago with his new employer, Teza Technologies LLC, a high-frequency trading start-up.

In court on Wednesday, the U.S. prosecutor on the case, Joseph Facciponti, said the ability of investigators to search Teza computers was circumscribed. He did not provide details, but said "a preliminary search shows we did not find any Goldman Sachs source code on the computers."

Judge Denise Cote scheduled November 29 for the start of a trial, which is expected to last two to three weeks.

Aleynikov and his lawyer, Sabrina Shroff, declined to comment after the court proceeding.

Goldman Sachs' high frequency trading system makes millions of dollars a year in profits. Aleynikov's arrest is credited with drawing attention to the fast-growing business of high-frequency trading in U.S. stocks.

The case is USA v Aleynikov, U.S. District Court for the Southern District of New York, No. 10-00096

(Reporting by Grant McCool; editing by Tim Dobbyn and Andre Grenon)