Trial opens over purported SocGen code theft
NEW YORK (Reuters) - A former Societe Generale trader was no run-of-the-mill thief but someone who stole valuable secret computer code from the French bank's lucrative high-frequency trading system to use at a new job, a U.S. prosecutor told a jury on Tuesday.
"Samarth Agrawal was a thief, but he wasn't just an ordinary thief," prosecutor Thomas Brown said in opening arguments of the trader's trial in U.S. District Court in Manhattan.
"He didn't steal cash or gold or diamonds. He stole something much more valuable. He stole a powerful way to make millions of dollars on the stock market."
Agrawal, a citizen of India, was arrested in April after U.S. prosecutors accused him of copying and printing the code last year so he could build a similar system for Tower Research Capital LLC hedge fund, which had offered him a job.
His lawyer, Ivan Fisher, told the jury that Agrawal, 27, had stolen nothing and would testify during the trial.
High-frequency trading, or high-speed automated trading, has become an increasingly important business, generating millions in profits for banks and brokerages. It came under the scrutiny of securities regulators after the May 6 stock market "flash crash".
Fisher said he would introduce "videotape of a person in the high-frequency trading group who actually shoved him (Agrawal) aside" to type the proprietary trading code into Agrawal's computer.
He told the jury that five of Agrawal's former colleagues would tell them was not a thief.
Agrawal, dressed in a dark suit, sat almost expressionless during the opening arguments. When he first arrived to sit at the defense table, he turned back to smile at his parents who traveled from India to attend the trial.
The former trader has been jailed since his arrest on April 19, the day he was to begin his new job at Tower. He faces a maximum of 10 years in prison if convicted of theft of trade secrets. He could also be deported.
Agrawal worked at Societe Generale's New York office from March 2007 to November 2009.
A spokesman for the bank has declined to comment on the trial. At the time of Agrawal's arrest, the bank said it had discovered an apparent misappropriation of confidential code and reported it to federal law enforcement authorities.
Tower said at the time that it did not hire people with the intent of receiving proprietary knowledge about previous employers.
The case echoed the July 2009 arrest of a former computer programer of Wall Street's most influential bank, Goldman Sachs Group Inc.
The trial of the programer, Sergey Aleynikov, is scheduled for November 29. He has been accused of stealing code in 2009 to take to his new employer, Teza Technologies LLC, a high-frequency trading start-up in Chicago.
The cases are USA v Agrawal, U.S. District Court for the Southern District of New York, No. 10-417 and USA v. Aleynikov in the same court No. 10-96.
(Reporting by Grant McCool)