The federal appeals court has overturned former Goldman Sachs programmer Sergey Aleynikov’s conviction for stealing proprietary high frequency trading code.
Aleynikov was sentenced to eight years in prison after being found guilty of theft of trade secrets in December 2010. He was released last week after a panel of judges at the U.S. Court of Appeals reversed the Russian-born Aleynikov’s conviction. The court has yet to issue an explanation for its decision, but has stated it will do so in due course.
Aleynikov’s conviction was built around charges that he circumvented Goldman Sachs’ security systems on his last day of work for the company in June 2009. According to the original conviction he then sent hundreds of thousands of lines of source code for Goldman’s high frequency trading system to a server in Germany, in order to build a HFT system for his new employer, Chicago-based Teza Technologies.
The case also alleged that the Aleynikov had transferred thousands of files relating to Goldman’s trading systems to his home computer during his time with the firm.
Aleynikov’s lawyer, Kevin Marino argued that the only code taken by his client was open source and had originally been written by him. Rather than industrial espionage, Marino contended that Aleynikov only intended to use the code as a ‘cheat sheet’. “There is no trade secret,” Marino said in court. “He took it to make his new job easier, he never intended to harm Goldman.”
However, the story may not yet be over. The appeals court was persuaded to waive a mandate ruling out any further challenge to its decision, leaving the way clear for a potential rehearing of the appeal.