Goldman Sachs algorithm theft trial begins

Jury selected for trial of programmer accused of stealing bank's trading code

A jury has been selected in the trial of Sergey Aleynikov, the ex-Goldman Sachs programmer accused of stealing the bank's algorithmic trading code.

The New York trial, which will begin today, follows the separate conviction of a programmer at rival bank Societe Generale. Indian citizen Samarth Agrawal was found guilty of stealing code, and faces potential deportation from the US or up to five years in jail.

Aleynikov, a Russian citizen who became a US national, was last year charged with theft of trade secrets and transfer of stolen property. While at Goldman Sachs, he was a high-level IT developer and had the title of vice president.

He resigned from the bank on 5 June last year, and in the days before that he is accused of having copied, encrypted and transferred approximately 32MB of proprietary code to a server located in Germany. A Unix-based Goldman Sachs operating system is said to have tracked his alleged actions.

He resigned to take a job with a new company "that intended to engage in high-volume automated trading", for triple his $400,000 salary, the complaint, by the FBI, said.

Aleynikov had admitted copying the code, the FBI stated in its original complaint, but had said he was collecting 'open source' files on which he worked. He said he later realised he had collected more files than intended.

Aleynikov maintains his innocence with regards to the charges. His attorney, Kevin Marino, said: "He did not steal or transport trade secrets from Goldman Sachs. He will be exonerated at trial."

The US government has already dropped a charge against Aleyniknov of unauthorised computer access.

Goldman Sachs has said high frequency trading represents less than one percent of revenue. But in a separate incident in 2007, a hi-tech hedge fund belonging to Goldman Sachs lost over $1.5bn (£750m) of its value after the computer algorithms it was using failed to deal with unpredicted stock market turbulence. Goldman Sachs subsequently had to spend over £1 billion bailing out the fund, alongside £500 million from outside investors.

On Facebook, the Sergey Aleynikov Fan Club thanks the programmer, because"indirectly he has given us all a priceless insight into the the dark side world of the mega market makers in the world of finance". A link posted on the wall also calls for donations to support his legal fees.

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Tags goldman sachsSecurity IDSergey Aleynikov

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