Wed, Jul 08, 2009 - Page 11 News List

Ex-Goldman Sachs worker charged

TRADE SECRETS: Sergey Aleynikov was charged with stealing a software code that facilitates market analysis and drives high-speed and high-volume transactions

THE GUARDIAN , NEW YORK

A former computer programmer at Goldman Sachs’ Wall Street headquarters has been charged with stealing trade secrets by downloading sensitive computer codes that drive the investment bank’s automatic trading systems.

Sergey Aleynikov, a 39-year-old Russian immigrant to the US, was arrested by FBI agents at New York’s Newark airport on Friday after Goldman raised the alarm over a suspected security breach.

A Manhattan judge granted Aleynikov bail on Monday on condition that he raises surety of US$750,000.

He is accused by US prosecutors of improperly copying codes used to drive trading systems and of uploading the information to a file-sharing Web site.

Court documents said the Web site is registered to an undisclosed individual in London but is associated with a computer server in Germany.

A criminal complaint filed by the FBI alleges that over the course of four days last month, Aleynikov uploaded 32MB of information from his employer, which is described in court documents simply as a “financial institution.”

However, it was identified by Wall Street sources as Goldman Sachs.

Aleynikov was on a salary of US$400,000 until his departure from Goldman last month to join a Chicago firm, which, he told his bosses, offered him triple his remuneration.

The complaint describes the information stolen from Goldman as a software code that drives a platform performing “sophisticated, high-speed and high-volume trades on various stock and commodity markets” by quickly obtaining and analyzing information about changes in market conditions.

“The trades made through the platform typically generate many millions of dollars of profit per year for the financial institution,” it said.

Aleynikov is accused of downloading the codes through his work desktop, a home computer and a laptop. Goldman discovered the alleged breach through monitoring systems that scan employees’ e-mail messages for transfers of computer code and flag up any attempts to upload files to external servers.

Software platforms used to drive automatic trades are considered to be highly commercially sensitive.

Goldman declined to comment, although a source close to the bank said there had been no impact on clients.

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