U.S. asks to seal courtroom to guard Goldman secrets

NEW YORK (Reuters) - Prosecutors asked a federal judge to seal the courtroom for part of the upcoming criminal trial of a former Goldman Sachs Group Inc computer programer, an effort to protect the secrecy of the bank’s high-frequency trading platform.

Prosecutors said in a court filing that there is a “compelling interest in favor of privacy” for Goldman in the trial of the former employee, Sergey Aleynikov.

They cited a federal law to protect owners of trade secrets and a desire not to cause the investment bank to be “re-victimized” through the release of confidential, proprietary trading secrets.

“Any public disclosure of a trade secret poses the substantial risk that the trade secret’s value to its owner will be significantly diminished, if not destroyed outright,” Assistant U.S. Attorney Joseph Facciponti wrote.

Aleynikov is accused of stealing Goldman’s computer code. He is set to go on trial on November 29 in U.S. District Court in Manhattan on two charges alleging theft of trade secrets and transportation of stolen property in interstate commerce.

A third charge alleging unauthorized computer access was dismissed last month. Aleynikov has pleaded not guilty.

Goldman did not immediately return a call seeking comment.

The Wall Street Journal earlier reported the request to seal the Manhattan federal courtroom.

It is common for parties to request the closure of courtrooms when proprietary secrets or sensitive information might otherwise be disclosed publicly.

Aleynikov is accused of improperly downloading Goldman code to an outside server on June 5, 2009, his last day working at the company.

The government contends he later took a laptop containing code and another storage device to his new employer, Teza Technologies LLC, a high-frequency trading start-up in Chicago.

Aleynikov was arrested at Newark Liberty International Airport on July 3, 2009. Teza later suspended him.

The defense has been seeking access to Goldman’s trading system, including source code.

In a separate Monday filing, defense lawyer Kevin Marino said this access is necessary to help Aleynikov show “the materials he is alleged to have stolen do not constitute a trade secret, and he did not and could not have intended to injure Goldman by taking those materials.”

Aleynikov was 40 at the time of his February 2010 indictment.

The case is U.S. v. Aleynikov, U.S. District Court, Southern District of New York, No. 10-cr-00096.

Reporting by Jonathan Stempel in New York, editing by Matthew Lewis