NEW YORK (Reuters) - A former Goldman Sachs Group programer was indicted on charges he stole computer code for the investment bank’s high-frequency trading platform, federal prosecutors said on Thursday.
The former programer, Sergey Aleynikov, 40, was arrested and charged in July. The three-count indictment alleges that Aleynikov, who worked at Goldman from May 2007 to June 2009, illegally transferred and downloaded “hundreds of thousands of lines of source code for Goldman’s high-frequency trading system” on his last day at the firm.
Aleynikov, according to the indictment, then uploaded the source code onto a laptop computer that he took with him to a meeting in Chicago with his new employer, Teza Technologies LLC, a high-frequency trading start-up.
Agents with the Federal Bureau of Investigation arrested Aleynikov at Newark Liberty International Airport upon his return from Chicago. He was held in custody over the July 4 holiday weekend before posting bail.
Aleynikov’s arrest is credited with shining a spotlight on fast-growing business of high-frequency trading, a computer-driven strategy that is said to be responsible for more than half of the daily trading volume in U.S. stocks.
The indictment said Goldman’s high-frequency platform generates “many millions of dollars in profits per year.” Goldman acquired some of the platform in 1999, when it paid $500 million for Hull Trading Co and has since made major improvements to the system.
The indictment specifically charges Aleynikov with one count of theft of trade secrets, one count of transportation of stolen property and one count of unauthorized computer access.
“In today’s information age, a theft of valuable intellectual property represents a serious breach of economic security,” Manhattan US Attorney Preet Bharara said in a statement.
Aleynikov’s lawyer, Sabrina Shroff, said she and her client were “very disappointed” by the prosecutor’s decision to seek an indictment. But she said Aleynikov would be “vindicated” at trial.
Shroff had asked prosecutors to consider a deferred prosecution agreement for her client.
A Goldman spokesman declined to comment.
No one from Teza, a trading firm started by several former Citadel Investment Group traders, was charged in the indictment.
If convicted, Aleynikov faces up to 25 years in prison. He is set to be arraigned on the charges on February 17.
The case is US v Aleynikov, U.S. District Court for the Southern District of New York, No. 09-mj-01553.
Reported by Grant McCool and Matthew Goldstein; Editing by Tim Dobbyn
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