Ex-Goldman Programmer’s Code Theft Case Handed to Jury

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Former Goldman Sachs Programmer Sergey Aleynikov
Sergey Aleynikov, a former Goldman Sachs Group Inc. computer programmer, leaves federal court in New York, on Dec. 9, 2010. Photographer: Jin Lee/Bloomberg

Jurors began deliberations Wednesday in the trial of former Goldman Sachs Group Inc. programmer Sergei Aleynikov, who contends taking the bank’s high-frequency trading code wasn’t a crime.

Aleynikov violated bank policies by copying 32 megabytes of code, transferring it to a server in Germany and then downloading it to his home computers, his attorney, Kevin Marino, told jurors in Manhattan. Doing so didn’t violate state law, he argued.

“Is a violation of a company policy a crime?” Marino asked. “No, it’s not.”

Manhattan District Attorney Cyrus Vance obtained a grand jury indictment of Aleynikov after a federal conviction on the same facts was thrown out.

Aleynikov, 45, is charged with unlawful use of secret scientific material and unlawful duplication of computer related material. He faces as long as four years in prison if convicted.

FBI agents arrested him at Newark Liberty International Airport in New Jersey in July 2009 as he returned from Chicago. He had taken a job with Teza Technologies LLC, the firm founded by former Citadel Investment Group LLC high-frequency trading chief Misha Malyshev.

Eight Years

Convicted in 2010 by a federal jury, Aleynikov was sentenced to eight years in prison. In 2012, his conviction was reversed. The U.S. Court of Appeals in New York said his actions didn’t violate the federal law he was charged under. Six months later, Vance brought his case.

Assistant District Attorney Daniel Holmes told jurors in his closing argument that Aleynikov stole the equivalent of “decades of work” by Goldman Sachs programmers so “he could come back later and use it at his new job.”

“If Goldman Sachs had a policy that you cannot assault your co-workers, does that mean if someone is assaulted they can’t call the police?” he asked. “Of course not.”

The case is New York v. Aleynikov, 04447-2012, New York State Supreme Court, New York County (Manhattan).

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