Teza Chief Says He Didn't Want Goldman Code

Dec 7 2010 | 1:06am ET

As the trial of one of his former employees enters its second week, former Citadel Investment Group high-frequency trading head Mikhail Malyshev said that he never asked Sergey Aleynikov to steal proprietary software from Goldman Sachs.

Aleynikov is accused of doing just that, copying vast portions of Goldman's high-frequency trading code in the days before he left the firm to join Malyshev's Teza Technologies. But even if Aleynikov had stolen the code to impress his new bosses, Malyshev said it wouldn't have worked.

"I don't think they're good at it," he told The Wall Street Journal.

Malyshev said that Teza has strict rules about employees bringing code from former employers, and that such activities are barred by their employment agreements. Still, during Citadel's successful battle for an injunction against Teza—the hedge fund giant accused Malyshev and Jace Kohlmeier, another former employee and co-founder of Teza, of violating their non-compete agreements—Malyshev admitted that Aleynikov had uploaded third-party software onto its computers.

He said, however, that "we know it's not" the Goldman code at the heart of the Aleynikov case.

Malyshev also took the opportunity to take a few potshots at Aleynikov, who was fired after his arrest last year. While Malyshev said Teza "percieved him as a very talented candidate," he said the 40-year-old showed a lack of maturity in disputes over his pay, vacation time and Teza's desire for him to work in New York rather than New Jersey.

"Honestly, I probably didn't do a good job negotiating," Malyshev said.

Meanwhile, the judge presiding over Aleynikov's trial sealed the courtroom for the second time during the case. U.S. District Judge Denise Code did so during the testimony of Konstantin Shakhnovich, a Goldman managing director, to protect Goldman's trade secrets.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note