A former Société Générale trader stole high-frequency trading software to build a similar system at the hedge fund he was joining.
Samarth Agrawal copied and printed the potentially lucrative code as he was preparing to leave SocGen earlier this year, prosecutor Thomas Brown said at the opening of Agrawal’s trial in New York this week.
“You will see that Samarth Agrawal was a thief, but he wasn’t just an ordinary thief,” Brown told the jury. “He didn’t steal cash or gold or diamonds. He stole something much more valuable. He stole a powerful way to make millions of dollars on the stock market,” which he planned to put into place at his new job at New York-based hedge fund Tower Research Capital.
Brown said he would show jurors a video of Agrawal printing out hundreds of pages of code just before his departure from SocGen. He also said that they would hear taped conversations between Agrawal and Tower Research partners.
But Agrawal’s attorney, in his opening, said he would show jurors a videotape of his own, this one showing “a person in the high-frequency trading group who actually shoved him aside” to enter the computer code into Agrawal’s computer. Indeed, Ivan Fisher said, Agrawal was working on the code at home—where authorities found the code—as part of his job at SocGen.
“Mr. Agrawal is not guilty,” Fisher said. “He stole nothing.”
Agrawal was arrested in April, on the day he was set to begin work at Tower Research. He has been held without bail since.
If convicted of theft of trade secrets, the Indian citizen faces up to 10 years in prison.
Tower Research has denied that it hired Agrawal with the intent of getting SocGen’s proprietary software. Several of the hedge fund’s partners and programmers are set to testify for the prosecution.
The Agrawal case is unrelated to a similar case in which a former Goldman Sachs programmer is accused of stealing that firm’s trading code before joining high-frequency trading firm Teza Technologies. The former Goldman trader, Sergey Aleynikov, is set to go on trial on Nov. 29.