Sergey Aleynikov allegedly stole some software from Goldman Sachs. While on the job, Aleynikov, a former quant at Goldman Sachs, would allegedly downlownd Goldman's software. Assistant United States Attorney Joseph Facciponti is prosecuting Aleynikov for theft of trade secrets. At Aleynikov's bail hearing, Facciponti argued that Aleynikov should not be released on bail. Yes, this is a trade secrets and not a murder prosecution.
In oral argument before Magistrate Judge Kevin N. Fox, Facciponti stated:
If this code is allowed to go to a competitor or to an entity that is not necessarily legal but can start trading with this, the bank itself stands to lose its entire investment in creating this software to begin with, which is millions upon millions of dollars.
The bank’s profit margin will be eroded -- and I’ll explain why in a minute -- by the other competit activity. In addition, because of the way this software interfaces with the various markets and exchanges, the bank has raised a possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.
In other words, they can take steps, they can start building a new program, they can -- I’m not exactly sure what steps they can take. But even if they could take steps, my understanding from them is that any dissemination of this program would be a substantial loss to them, a very substantial loss to them.
After more than a week of silence, Goldman Sachs finally commented publicly on the alleged theft of computer codes by former programmer Sergey Aleynikov calling losses sustained as a result would be “very, very immaterial.”
Those words were spoken by David Viniar, Goldman’s Chief Financial Officer, in response to a Reuters question during a conference call with reporters to discuss the company’s robust second quarter earnings.
Aleynikov, a former Goldman computer programmer, was arrested on July 3.
“We still have all of the code,” Viniar said. “It is not like the code had been lost to Goldman Sachs. And even if it had been, it is a small piece of our business.”
There are many things suspicious about the Aleynikov prosecution. Most suspicious: Allegedly Goldman Sachs called the FBI to report Aleynikov's theft on Wednesday, July 1, 2009. Two days later, Aleynikov was arrested. Aleynikov's bail hearing was held on July 4, 2009. That's swift "justice."