Sunday, 28 August 2016
Last updated 1 day ago
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."