Judge denies bail in ex-SocGen trader code case

NEW YORK (Reuters) - A judge denied bail on Thursday for a former Societe Generale trader who was arrested and charged with theft of computer code used in high-frequency trading in the bank's New York office.

The former trader, Samarth Agrawal, 26, was filmed by a bank surveillance camera copying and printing the code the day before he left Societe Generale last November, U.S. prosecutor Thomas Brown said at a bail hearing in Manhattan federal court.

He said FBI agents found printouts of the code on a desk in Agrawal's apartment when he was arrested on Monday.

Brown argued that Agrawal, a citizen of India on a work visa, had incentive to flee the United States. He told the court that during the past year Agrawal had made four separate transfers totaling more than $160,000 to a bank in India from an account in New York.

"The very essence of the charges concern a breach of relationship of trust," U.S. Magistrate Judge Michael Dolinger said. "This is one of those rare cases in a nonviolent, non-narcotics case where the government has met its burden for detention."

Agrawal's attorney, Steven Statsinger, had argued that his client had several friends who were willing to guarantee a bond of up to $500,000.

High-frequency trading has become an important business for some Wall Street's banks, generating millions of dollars in profits each year.

Agrawal was charged with theft of trade secrets. The court heard that he had been offered employment with an investment firm but was arrested the day he was scheduled to begin work.

The firm, Tower Research Capital LLC of New York, confirmed it had offered Agrawal employment. The firm said in a statement that it was "shocked" by Agrawal's arrest and was cooperating with authorities in the investigation.

"Tower believes strongly in the proprietary rights of third parties, including our competitors, and we take steps to assure that our employees abide by those rights," said the statement by the firm's general counsel, Sandy Choi. "In hiring, Tower chooses individuals based on their experience, knowledge and background, with no intent of accessing proprietary knowledge they may have acquired from previous employers."

Agrawal faces up to five years in prison if convicted and he could also be deported from the United States.

The case is: USA v Samarth Agrawal, U.S. District Court for the Southern District of New York, No. 10-mag-779.

(Reporting by Grant McCool; Editing by Tim Dobbyn)