UPDATE 4-Ex-Goldman programmer out on bail in theft case

* Computer expert accused of stealing trading codes

* Goldman has not seen business or clients harmed - source

* NYSE says no connection with dropped trading report
(Updates throughout with bail conditions met)

By Martha Graybow

NEW YORK, July 6 (Reuters) - A former Goldman Sachs Group
Inc (GS.N) computer programmer accused of stealing secret
trading codes from the financial firm has been released from
federal custody after posting bail, authorities said on
Monday.

Sergey Aleynikov, 39, was arrested by the FBI on Friday and
charged with "theft of trade secrets." He met the terms of his
$750,000 bail and was released Monday, said FBI spokesman James
Margolin.

Aleynikov is accused of misusing computer codes that belong
to his former employer, a New York-based financial institution
that authorities did not identify in court papers but sources
say is Goldman Sachs. [ID:nN05180222]

A transcript of Aleynikov's appearance before U.S.
Magistrate Kevin Nathaniel Fox in Manhattan on Saturday also
shows that Aleynikov worked for Goldman.

His lawyer, Sabrina Shroff, said at that proceeding that
Aleynikov told authorities after his arrest that he did not
intend to sell the information or use it "contrary to my
employment agreement with Goldman Sachs."

Goldman has not seen its business or clients harmed by the
purported computer breach, a source familiar with the situation
said on Monday. The firm declined to comment.

The case could shed light on the workings of intricate
trading systems developed by Goldman. It also raises questions
about the security of lucrative Wall Street proprietary trading
operations.

However, the New York Stock Exchange said on Monday there
was no connection between the alleged security breach and an
error that dropped Goldman from a trading report the NYSE
issued last week. [ID: nN06272162]

Aleynikov, a Russian immigrant living in New Jersey, was
arrested on Friday night as he got off a flight at Newark
Liberty International Airport, according to an FBI affidavit
filed in the case.

Aleynikov had been held at the Metropolitan Detention
Center in Brooklyn.

Terms of his bail required a $750,000 personal recognizance
bond to be secured by three financially responsible people.

The bail also included $75,000 in cash, and Aleynikov was
ordered to surrender his travel documents and not to access the
computer data at issue in the case.

A preliminary hearing was scheduled for Aug. 3.

Authorities contend Aleynikov stole codes used for
sophisticated automated stock and commodities trading. They say
Aleynikov, who earned $400,000 a year at Goldman, improperly
copied proprietary computer code and then uploaded it to a
computer server in Germany.

After he was arrested, he told authorities he had only
intended to collect "open source" files on which he had worked
but "later realized that he had obtained more files than he
intended," the FBI agent said in the court papers.

The FBI said Aleynikov worked at the financial institution
from May 2007 until June 5, when he left to work for a new
company focused on high-volume automated trading.

Aleynikov's wife, Elina, told Reuters on Sunday that her
husband is innocent. She said in a phone interview from the
couple's New Jersey home that her husband worked hard for
Goldman and has been a good citizen who has lived in the United
States for 19 years.
(Reporting by Martha Graybow, additional reporting by Jonathan
Spicer and Elinor Comlay, editing by Richard Chang, Tim Dobbyn
and Matthew Lewis)