October 6, 2009 / 12:06 AM / 11 years ago

Teza CIO says another employee reprimanded over code

CHICAGO, Oct 5 (Reuters) - A top executive at Teza Technologies said on Monday that the high frequency trading startup had reprimanded another employee last month after it learned he uploaded code to company computers that he may have developed at a previous employer.

Testifying in the civil lawsuit filed against Teza by Citadel Investment Group, Chief Information Officer William Sterling said Teza had immediately removed the code from its systems.

Sterling, a former top IT executive at UBS AG UBSN.VX, said the reprimanded programmer had joined Teza from the Swiss banking giant as well — but it was unclear when or where the code had been written.

Teza, founded by three former Citadel employees, made headlines this summer when one of its hires, a former Goldman Sachs Group (GS.N) computer programmer named Sergey Aleynikov, was arrested and charged with stealing secrets from the investment bank. Aleynikov denied the charges but Teza fired him.

Citadel subsequently filed a lawsuit against Teza, claiming that former employees Mikhail Malyshev, Jace Kohlmeier and Matthew Hinerfeld had violated their non-compete clauses by starting the firm.

Final arguments in that lawsuit, which seeks an injunction against Teza that the company’s founders say would effectively kill the company, are expected on Friday.

In his testimony on Monday, Sterling said Teza’s legal difficulties had made it unlikely the company would be able to begin trading by December 1, the original internal target date.

“I’m not confident that’s a realistic date,” Sterling said. “A lot has changed ... that could impact our ability to go live.” (Reporting by James B. Kelleher, editing by Leslie Gevirtz)

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