Wednesday, 26 October 2016
Last updated 2 hours ago
Aug 1 2013 | 10:14am ET
A former bank trader convicted of showing its high-frequency trading code to the hedge fund where he was seeking a job will stay in prison, a federal appeals court has ruled.
The U.S. Second Circuit Court of Appeals rejected Samarth Agrawal's appeal of his 2010 conviction for stealing Société Générale's code and sharing it with Tower Research Capital, which hired him. The same court last year threw out the conviction of the similarly-situated Sergei Aleynikov, who had been convicted of stealing Goldman Sachs' HFT code.
In the Aleynikov case, the Second Circuit ruled that violating Goldman's policies is not the same as violating the law. But it rejected the same argument in Agrawal's case. Aleynikov is now facing similar charges in state court.
For most of his 2010 trial, Agrawal denied any wrongdoing. But testifying towards its end, he admitted that he took the code and gave it to Tower, astonishing U.S. District Judge Jed Rakoff, who presided. "Frankly, I'm puzzled by the present situation," the judge said. "The defendant has admitted all essential elements of at least the first count of the indictment and probably the second count."
Rakoff sentenced Agrawal to three years in prison.