August 17, 2009 / 10:03 PM / 10 years ago

Ex-Goldman programmer eyes dismissal

NEW YORK (Reuters) - A federal judge has granted more time for the government to seek an indictment against or work out a settlement with a former Goldman Sachs Group Inc programer accused of stealing trade secrets, after the programmer’s lawyer said she wants the case dismissed.

U.S. Magistrate Judge James Francis delayed further proceedings by 30 days until September 16 to let the government and Sergey Aleynikov, the former programer, continue talks.

Assistant U.S. Attorney Joseph Facciponti said talks to resolve the case have gone on from July 7 to as recently as August 13, and that justice would be served by giving the parties more time. Talks were previously extended on August 3.

It is common for prosecutors to ask to extend a deadline for seeking an indictment while plea negotiations are taking place. The request does not mean a settlement is forthcoming.

Prosecutors have accused Aleynikov of downloading stolen Goldman proprietary code onto a home computer, a theft that could cost the Wall Street bank millions of dollars.

Aleynikov has told investigators that Goldman knew he had worked on the relevant code from home previously without complaint, and that he had no intent to steal.

The FBI arrested Aleynikov on July 3 at Newark Liberty International Airport. He was later freed on $750,000 bail following several days of detention.

At a hearing on August 10, Aleynikov’s lawyer said she would seek to persuade prosecutors to enter a “deferred prosecution” agreement for her client.

Such agreements let accused persons escape criminal charges so long as they do not break the law for some period of time.

“I’m looking to show the United States Attorney’s Office that my client never engaged in any improper behavior, was a well-respected employee, was not fired, was not reprimanded, nor were there any complaints issued against him,” Aleynikov’s lawyer, Sabrina Shroff, said at the August 10 hearing.

A copy of the hearing transcript was reviewed by Reuters.

Shroff did not immediately return a call seeking comment. A spokeswoman for U.S. Attorney Preet Bharara declined to comment.

Aleynikov worked at Goldman in New York for two years before joining Chicago-based Teza Technologies LLC in June. Teza suspended him following his arrest.

The case is U.S. v. Aleynikov, U.S. District Court, Southern District of New York (Manhattan), No. 09-mag-01553.

Reporting by Jonathan Stempel, editing by Matthew Lewis

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