Thieving Goldman Programmer Gets Eight Years

Mar 21 2011 | 7:24am ET

The former Goldman Sachs programmer convicted of stealing the firm's high-frequency trading code on his way out the door was sentenced to more than eight years in prison on Friday.

Sergey Aleynikov downloaded "substantial portions" of that code on his last day at work at Goldman in the summer of 2009. He brought the fruits of that endeavor to a meeting with his new employers, Teza Technologies, the controversial HFT firm founded by several former Citadel Investment Group veterans, less than month later.

Teza denies it had any knowledge of Aleynikov's actions and has said it was not interested in Goldman's code.

That firm has been no stranger to the inside of a courtroom; Citadel sued it almost immediately, alleging that its founders had violated their non-compete agreements and that it was in imminent danger of "industrial espionage." The hedge fund giant labeled Teza a "veritable pirate ship of illegal activity."

Earlier this month, Teza co-founder Mikhail Malyshev, the former head of Citadel's HFT division, was indicted for perjury.

Aleynikov was convicted in December; earlier last week, U.S. District Judge Denise Cote refused his request to toss the guilty verdict or order a new trial. Instead, she imposed the 97-month sentence and a $12,500 fine.

Aleynikov "deserves a significant sentence because the scope of his theft was audacious—motivated solely by greed, and it was characterized by supreme disloyalty to his employer," Cote said at his sentencing.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.