Judge Junks Most Evidence Against Alleged Software Thief

Jun 23 2014 | 9:33am ET

Sergey Aleynikov’s five-year legal odyssey never should have begun, a judge has ruled, increasing the likelihood that the former Goldman Sachs computer programmer will be acquitted at his second trial for allegedly stealing the bank’s high-frequency trading code.

Aleynikov was arrested in 2009 His home was searched and a number of computers and other equipment seized.

But New York State Judge Ronald Zweibel said that the arrest was “illegal” and that the Federal Bureau of Investigation “did not have probable cause to arrest the defendant, let alone search him or his home.” As a result, Zweibel suppressed much of the evidence prosecutors planned to use against Aleynikov, including his first statements to the FBI, given before he was read his rights. Those are “the fruit of the poisonous tree” of the “illegal arrest,” Zweibel said. Later statements will be allowed into the trial, due to Aleynikov’s waiving of his right to counsel.

Aleynikov, who allegedly planned to deliver Goldman’s software to Teza Technologies, a controversial HFT firm founded by several former Citadel Investment Group traders that has not been accused of wrongdoing in the case, still must face the criminal charges, under which he faces four years in prison. Zweibel last May rejected his bid for a dismissal.

It will be Aleynikov’s second time before a jury: He was convicted in federal court of similar charges in 2010 and spent more than a year in prison before a federal appeals court threw out the guilty verdict. Zweibel said that Aleynikov’s computers should have been returned to him after that reversal, rather than handed over to the Manhattan District Attorney’s office.

“Justice Zweibel’s decision represents a damning indictment” of the case against Aleynikov, his lawyer, Kevin Marino, said. “We are confident that today’s decision is another important step on Sergey Aleynikov’s long journey to complete vindication.”


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

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

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.