Judge briefly closes Goldman secrets trial

NEW YORK (Reuters) - The trial of a former Goldman Sachs Group Inc computer programer was briefly shuttered to the public due to the sensitivity of some testimony accusing him of stealing the bank’s secret trading code.

Sergey Aleynikov departs from federal court in New York February 17, 2010. REUTERS/Chip East

Observers and journalists were shut out of a New York courtroom for about 40 minutes on orders of a U.S. judge while the jury heard testimony from a Goldman manager about the Wall Street bank’s lucrative speed-trading system.

A grand jury indicted programer Sergey Aleynikov, 40, in February on a charge of trade secrets theft and one other criminal count. Prosecutors accused him of stealing critical parts of the trading code in June 2009 before going to a new job with Teza Technologies LLC, a speed-trading start-up firm in Chicago.

Aleynikov has been free on bail since his July 2009 arrest. If convicted, he faces a possible maximum prison sentence of up to 10 years.

At least one news organization and one member of the public formally objected to any part of the trial being closed.

“There is no lack of public notice here,” U.S. District Judge Denise Cote said, referring to the government’s application to close parts of the trial more than a month ago so as to protect the secrecy of Goldman’s system from competitors.

“We have had numerous conferences about it,” the judge said from the bench while the jury was not present. “There has been nothing done off the record or in secret yet.”

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

Cote had said she would consider the government’s applications as they came up during the trial. Prosecutors have asked for the court to be closed for portions of the testimony by three witnesses, all Goldman employees.

The first of those, Aleynikov’s former supervisor, Adam Schlesinger, began his testimony on Wednesday and continued on Thursday. The courtroom was locked for about 40 minutes for a portion of his testimony to the jury.

Five people were permitted by the judge to remain in the public seats, including representatives of Goldman Sachs.

Prosecutors have also asked the judge to close the courtroom for the testimony of two other witnesses -- Konstantin Shakhovich, one of the lead developers of Goldman’s high-frequency trading team, and Navin Kumar, a programer, according to court records.

A Goldman spokesman, Ed Canaday, declined to comment.

A lawyer for Aleynikov said in Tuesday’s opening arguments that the programer did not harm and could not have harmed Goldman Sachs. He said his client may have breached Goldman’s confidentiality policy, but criminal prosecution under the Economic Espionage Act was inappropriate.

The judge has allowed three weeks for the trial, which could end by December 17.

The case is USA v Aleynikov, U.S. District Court for the Southern District of New York, No. 10-96.

Reporting by Grant McCool; editing by Derek Caney and Andre Grenon