NEW YORK (Reuters) - The criminal prosecution of Sergey Aleynikov, the former Goldman Sachs Group Inc programer charged this past summer with stealing some of the computer code for the firm’s high-frequency trading program, appears headed to a rather anti-climatic conclusion.
In a court filing on Monday, federal prosecutors revealed that Aleynikov’s attorney plans to seek a resolution of the case that could culminate in either a deferred prosecution agreement, or a plea to a reduced charge of a misdemeanor. Prosecutors say they intend to “evaluate’’ the request for a deferred prosecution.
In light of the anticipated request from Aleynikov’s lawyer, Assistant US Attorney Joseph Facciponti asked a U.S. magistrate judge to extend the time that prosecutors must act to begin trying Aleynikov on the theft of trade secrets charge until December 16. Aleynikov was originally arrested and arraigned on the theft charge over the July 4th weekend.
Typically, in a deferred prosecution, a prosecutor will agree to dismiss all charges against a defendant if they fulfill certain requirements. Deferred prosecutions are often used in cases involving corporate frauds and sometimes for dealing with first offenses.
Aleynikov’s arrest shined a spotlight on high-frequency trading and galvanized attention on this rapid-fire trading strategy, which is entirely dependent on sophisticated algorithm formulas.
At the time of his arrest, prosecutors raised the possibility that Aleynikov might look to personally profit by either selling the allegedly pilfered trading code, or taking it with him to his new employer — a high-frequency trading startup firm called Teza Technologies.
But the apparent willingness of prosecutors to consider a deferred prosecution may be an indication that law enforcement has found no evidence that Aleynikov intended to sell the information he allegedly stole.
Reporting by Matthew Goldstein; Editing Bernard Orr