Ex-Citadel Engineer Arrested For Stealing HFT Code

Oct 14 2011 | 7:47am ET

A fired Citadel Investment Group software engineer has been arrested for stealing trade secrets from the hedge fund giant.

Yihao Pu, who was let go in August for the alleged crime, was charged in Chicago federal court. According to U.S. Attorney Patrick Fitzgerald, Pu, who joined Citadel last year, "was attempting to construct a trading strategy similar to the one used by Citadel."

Pu, who was also sued by Citadel in August, is being held in custody, pending a detention hearing later today. He faces up to 10 years in prison and a $250,000 fine if convicted.

According to the complaint, Pu illegally downloaded components of Citadel's high-frequency trading code, on which he was working.

In its own suit against Pu, Citadel said it discovered his misdeeds when he downloaded an "unusually large amount of data and programs." The hedge fund said Pu repeatedly lied to it about his activities and that he had been in touch with Teza Technologies, a firm founded by several Citadel veterans that Citadel has accused of stealing its proprietary systems.

At the time of the Citadel suit, Pu said his now former employer had "overreacted."


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

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.