Corrected-Prosecutor, Goldman overreached: programmer's lawyer
* Lawyer Marino says prosecutors acted hastily
* He says Goldman's clout influenced prosecutors
* US Attorney says it makes decisions to charge on merit
NEW YORK, Feb 22 (Reuters) - Kevin Marino may be the lawyer of the moment, after persuading a U.S. appellate court panel last week to overturn the criminal conviction of a former Goldman Sachs Group computer programmer.
The U.S. Court of Appeals moved with rare and unprecedented speed in reversing Sergey Aleynikov's conviction on a charge of stealing trade secrets, just hours after Marino appeared before the three-judge panel to argue on his client's behalf.
And the New Jersey attorney is not mincing any words when it comes to discussing his feelings about federal prosecutors, Goldman Sachs and the highly publicized criminal case that Marino says never should have been brought against his 42-year-old client.
"There isn't any doubt that the heft and strength of Goldman Sachs figured prominently in what turns out to be a hastily made decision to charge someone with crimes he did not commit and to slavishly stick to it," said Marino, in an interview a week after the appellate court issued a terse one paragraph order entering a judgment of acquittal.
The July 3, 2009 arrest of Aleynikov raised the profile of rapid-fire stock trading after the former Goldman Sachs employee was charged by federal authorities with stealing some of the source code for the Wall Street firm's high-frequency trading program.
At the time of his arrest, some in the high-frequency trading industry said Aleynikov was wrong to have downloaded some of the source code onto his personal computer, but that the matter should not have been treated as a criminal offense nor an act of economic espionage.
Marino said it was Goldman Sachs' political and financial clout that got federal prosecutors and the Federal Bureau of Investigation to move so swiftly and arrest Aleynikov on a July 4th holiday weekend. He said the FBI arrested his client at Newark Liberty Airport in New Jersey within 48-hours of getting a call from officials at Goldman Sachs that he had stolen the source code.
"You and I couldn't get the attention of the U.S. Attorney," said Marino, a partner in the Chatham, New Jersey law firm Marino Tortorella & Boyle. "But Goldman Sachs is able to pick up the phone and on 48 hours notice of the FBI first hearing Sergey's name, they are at an airport arresting him."
Ellen Davis, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, rejected Marino's charge.
"Our charging decisions in every case are based exclusively on the facts and the evidence," said Davis. "We prosecute individuals and entities who violate the law, regardless of their status, when we believe we can prove the charges beyond a reasonable doubt as we did in the case of Serge Aleynikov."
Goldman Sachs spokesman David Wells said all the company did was bring the matter to the attention of federal authorities. Said Wells. "They decided whether or not it merited prosecution."
Aleynikov, who was convicted by a federal jury in December 2010 of stealing trade secrets in violation of the Economic Espionage Act of 1996, was freed from federal custody while Barbara decides how to proceed. At the time of the appeals court reversal, Aleynikov had been in federal prison for nearly a year on an eight-year sentence.
The ruling by the appeals court stunned some in the legal community because the judges moved so quickly without issuing a formal written opinion explaining their rationale. Lawyers said it is rare for an appellate court to overturn a conviction within hours after hearing oral argument by the attorneys on the appeal.
"It is unusual for appeals courts to reverse decisions of this sort, whether it's state trade secret law or the Economic Espionage Act," said Richard Horowitz, a New York lawyer who has written extensively on the subject. "Generally, these things don't get appealed that often or the appeals aren't that successful."
An audio transcript of the 35-minute oral argument reveals that three appellate judges gave a real grilling to prosecutors. At times the three judges asked so many rapid fire questions, Assistant U.S. Attorney Joseph Facciponti barely had time to answer.
From the tenor of the questioning it appears the judges agreed with Marino's basic argument that the trading source code had nothing to do with interstate commerce -- a critical element under the law that Aleynikov was charged with violating.
Circuit Judge Guido Calabresi told the prosecution's legal team that the trial judge's definition of interstate commerce "may be too broad."
At another point during the oral argument, Chief Judge Dennis Jacobs seemed to agree that the prosecution and the trial judge were giving too expansive a view of what constitutes interstate commerce.
But until the panel issues a written decision it is not clear what, if any, implications the reversal in Aleynikov's case will have on other Wall Street traders who improperly download their companies' HFT computer code.
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