July 6 (Bloomberg) -- A Russian immigrant said to be a former Goldman Sachs Group Inc. computer programmer was charged by federal prosecutors with stealing trade secrets from the bank, including codes for high-volume trades.

Sergey Aleynikov was arrested July 3 after he arrived at Liberty International Airport in Newark, New Jersey, prosecutors said today. He had previously worked in Goldman’s New York offices, according to a person familiar with the case.

Aleynikov told federal agents he took secret computer trading codes and that he intended to collect only “open source,” or nonsecret, files on which he worked, prosecutors said. He admitted copying and encrypting the data, according to the government.

The proprietary code lets the firm do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

Aleynikov, a naturalized U.S. citizen who prosecutors said earned $400,000 a year, appeared July 4 in federal court in Manhattan and was ordered held in lieu of posting $750,000 bail. He planned to earn three times his salary by joining a new company and engaging in high-volume automated trading, prosecutors said.

Defense Attorney

Defense attorney Sabrina Shroff didn’t return a call for comment. Joe Snodgrass, a spokesman for Goldman, declined to comment.

Goldman was the world’s biggest and most profitable securities firm until it converted to a bank in September following the bankruptcy of smaller rival Lehman Brothers Holdings Inc. Goldman earned $2.3 billion last year, down from a record $11.6 billion in 2007, as market turmoil caused it to report a fourth-quarter loss, its first in a decade as a public company.

The bank previously took steps to block the transfer of its computer code to outsiders, including scanning outgoing e-mail, prosecutors said. Aleynikov signed a confidentiality agreement with Goldman acknowledging the code was proprietary, they said.

Michael McSwain, a Federal Bureau of Investigation agent, said in a criminal complaint that Aleynikov downloaded files “to his home computer, his laptop computer and a portable memory device.”

Worked at Firm

Aleynikov worked at the firm from 2007 until June, the government said in the complaint. At New York-based Goldman, he was part of a team of workers responsible for improving the computer platform. His alleged transfer of computer codes ran from June 1 to June 5, according to the filing.

Aleynikov studied applied mathematics at the Moscow Institute of Transportation Engineering before transferring to Rutgers University, where he received a bachelor’s degree in computer science in 1993 and a master’s of science degree, specializing in medical image processing and neural networks, in 1996, according to his profile on social-networking site LinkedIn. Before joining Goldman Sachs he worked for about eight years at IDT Corp., the U.S. vendor of prepaid calling cards, where he led the team responsible for developing routing systems, the profile says.

His profile on LinkedIn describes him as a vice president in equity strategy at Goldman Sachs and includes two recommendations from colleagues at the firm.

Highest Revenue

Goldman had the highest revenue from trading equities of all of its Wall Street competitors, aided in part by its electronic trading system. The current and former chief executives of the New York Stock Exchange, John Thain and Duncan Niederauer, both worked at the firm before joining the stock exchange.

Goldman’s equities business generated $2 billion of revenue in the first three months of 2009, down 20 percent from the first quarter of 2008, the company reported in April. Second- quarter results are due to be reported next week.

By comparison, Morgan Stanley made $900 million in revenue from equities in the first quarter; JPMorgan Chase & Co.’s equities business generated $1.8 billion; and Citigroup Inc. made $1.9 billion, according to company reports.

Goldman rose $2.97, or 2.1 percent, to $146.46 in New York Stock Exchange composite trading.

The case is U.S. v. Aleynikov, U.S. District Court for the Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in New York federal court at dglovin@bloomberg.net and; Christine Harper in New York at charper@bloomberg.net.

Last Updated: July 6, 2009 16:32 EDT