Second Ex-Citadel Worker Guilty in Trade-Secrets Case

A former Citadel LLC employee whose job was to research and develop high-frequency trading strategies pleaded guilty to obstructing a probe into the theft of trade secrets from the Chicago-based investment firm.

Sahil Uppal, 26, entered his plea today before U.S. District Judge Charles Norgle in Chicago, five days after co-defendant Yihao Pu pleaded guilty to taking proprietary information from Citadel and to stealing computer code from a New Jersey company. Their trial had been set for Sept. 2.

Led by founder Kenneth C. Griffin, Citadel manages more than $20 billion in assets, according to its website.

Pu and Uppal joined Griffin’s firm four months apart in 2010 after working for a Red Bank, New Jersey, investment technologies business, according to an April 2013 indictment.

Each signed a non-disclosure agreement, pledging not to use Citadel’s confidential information for anyone else’s benefit including their own.

By the time he arrived at Citadel, Pu, 26, had already taken proprietary computer code from the New Jersey firm, he confessed in court last week. The firm wasn’t identified in court filings. Uppal today admitted he’d written three computer scripts for quantitative trading for Citadel and transferred them to a computer accessible by him and Pu, without the firm’s permission.

Equipment Removed

In August 2011, Citadel representatives confronted Pu with their suspicions that he had taken confidential information and told him to return anything he had. Uppal and an unidentified person later removed computer equipment from Pu’s apartment, including hard drives containing the firm’s confidential information, Assistant U.S. Attorney Lindsay Jenkins told Norgle today, reading from a plea agreement.

After telling Uppal he faced as long as 20 years in prison and a top fine of $250,000, Norgle asked, “What have you decided to do?”

“I have decided to plead guilty,” Uppal said.

Sentencing for both men is set for Nov. 7.

Uppal’s attorney, Daniel Collins, declined to comment after today’s hearing. Katie Spring, a spokeswoman for Citadel, had no immediate comment on Uppal’s plea.

Pu was first charged in 2011. A later 13-count indictment was revised in 2013 to add charges against him and introduce seven against Uppal, including six for wire fraud.

Pu, who faced more than 20 counts including wire fraud, theft of trade secrets, computer fraud and obstruction, pleaded guilty to two counts of stealing trade secrets, each of which is punishable by as long as 10 years in prison and a $250,000 fine.

The case is U.S. v. Pu, 11-cr-00699, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn

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