Ex-Flow Traders Employee Pleads Guilty in Code-Theft CaseChris Dolmetsch
One of three men accused of stealing software from the Dutch trading house Flow Traders BV pleaded guilty to related charges two months ago, the first of a group of Wall Street workers pursued by Manhattan authorities for such theft to resolve his case.
Jason Vuu, a former trader at the Amsterdam-based firm, admitted to unlawful duplication of computer-related material and unlawful use of secret scientific material in October before New York state Supreme Court Justice Laura Ward in return for probation, his attorney, Jeremy Saland, said after an appearance before the judge in Manhattan today. Vuu faced as long as four years in prison on each count if convicted.
Vuu, 27, along with another ex-Flow Traders employee, Glen Cressman, 28, of Fort Lauderdale, Florida, and Vuu’s former roommate, Simon Lu, 26, of Pittsburgh, were charged in August 2013 and accused of copying and taking proprietary trading strategy files and computer source code.
They are part of a group of Wall Street analysts and programmers charged by Manhattan District Attorney Cyrus Vance Jr.’s office with intellectual-property theft from financial firms. Wall Street is increasingly protective of its trading models and software code, which have become more valuable as firms seek millisecond advantages over rivals through strategies such as high-speed trading.
The three men were charged with the same crimes as Sergey Aleynikov, the former Goldman Sachs Group Inc. programmer accused of stealing software code from his old firm, and Kang Gao, a former analyst for quantitative hedge fund Two Sigma accused of taking trading strategies and models.
Aleynikov was freed from federal prison in New Jersey in 2012 after an appeals court overturned his conviction. He was charged for the same alleged conduct by Vance’s office six months later and is scheduled to go to trial in April. Gao is set to be tried as early as February. Both men have pleaded not guilty.
Vuu’s sentencing, originally scheduled for today, was postponed until February to address a dispute over possible restitution, Saland said. His client isn’t cooperating with prosecutors, according to the lawyer, who declined to comment further on the case.
Emily Tuttle, a spokeswoman for Vance’s office, declined to comment today on the plea and Flow Traders didn’t immediately respond to an e-mail.
Cressman is scheduled to appear before Ward on Dec. 22, while Lu’s next appearance is set for Feb. 9, according to court records. Both men have pleaded not guilty. Charles Ross, an attorney for Cressman, and Paul Schechtman, a lawyer for Lu, didn’t immediately respond to phone messages seeking comment on Vuu’s plea.
Flow Traders describes itself on its website as a “leading international proprietary trading house” founded in 2004 in Amsterdam that trades securities, futures, options, exchange-traded funds, commodities, bonds and foreign exchange instruments.
Vuu and Cressman worked as traders in the firm’s Manhattan office before resigning in March 2013, according to a statement from Vance’s office after they were indicted in October 2013.
Vuu is accused of e-mailing himself strategies for several of the company’s trading desks and computer code for its proprietary-trading platform from August 2011 to August 2012, according to Vance.
Vuu worked with Lu, a friend from college, to create a trading platform for a company they planned to form, Vance said. Cressman e-mailed himself proprietary trading strategies on two occasions in December 2012, according to the district attorney.
Searches of their homes turned up several electronic devices capable of being used to share stolen code, Vance’s office said. The cases led Vance to call on the state Legislature to adopt recommendations of a task force on white-collar crime and protect intellectual property as rigorously as physical property.
Vuu told authorities after his arrest that he worked for Flow Traders for three years and quit “because of a newborn baby and stress,” according to a voluntary disclosure form provided by prosecutors. Vuu said he “never took any source code and didn’t have access to it.”
“I did not send myself anything,” Vuu told authorities. “I am developing my own trading system, which is written in C# as opposed to the Java used by Flow Traders. I had a project called ‘Turtle,’ but have started something new called ‘Alpha.’ I spoke with a company in China to start trading there, but decided not to.”
According to the disclosure, Lu told authorities that Vuu, who was his roommate for several years at the Massachusetts Institute of Technology, asked him about a year before they were charged to help develop a computer-based trading platform that they began working on in February. Lu said he did the work voluntarily, “as a hobby.”
Lu said he had no knowledge of Vuu’s relationship with Flow Traders, other than that he worked there, and said he never discussed proprietary code of any kind with him. Lu said he used a freely available code.
“To the best of my knowledge, everything I worked on was freely available publicly, or commercially purchased,” Lu told authorities, according to the filings.
The cases are People of the State of New York v. Vuu, 3869/2013, and People of the State of New York v. Cressman, 3870/2013, New York State Supreme Court, New York County (Manhattan).
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.