Goldman Sachs’ high-frequency trading system generates millions of dollars in annual profits for the firm. Obtained in 1999 as part of Goldman’s $500 million acquisition of Hull Trading Company, the high-frequency trading system has since been modified and maintained, and Goldman Sachs took significant measures to protect the confidentiality of the system’s computer programs (including firewalls to limit access to the firm’s computer network, and limiting internal access to the high-frequency trading program). Several measures were taken to protect the system’s source code, including requiring all Goldman Sachs employees to agree to a confidentiality agreement.
From May 2007 to June 2009, Sergey Aleynikov was employed at Goldman Sachs as a computer programmer responsible for developing computer programs supporting the firm’s high-frequency trading on various commodities and equities markets. In April 2009, Aleynikov resigned from Goldman Sachs and accepted a job at Teza Technologies (“Teza”), a newly-formed company in Chicago, Illinois. Aleynikov was hired to develop Teza’s own version of a computer platform that would allow Teza to engage in high-frequency trading.
Beginning at approximately 5:20 p.m. on June 5, 2009, Aleynikov’s last day at Goldman Sachs, he transferred substantial portions of Goldman Sachs’s proprietary computer code for its trading platform to an outside computer server in Germany (all of which was accomplished while working at his desk at Goldman Sachs). Without informing Goldman Sachs, Aleynikov encrypted the files and transferred them over the Internet. After transferring the files, he deleted the program he used to encrypt the files and deleted his computer’s “bash history,” which records the most recent commands executed on his computer.
To view the rest of the post, follow the link to the story at the Broke and Broker blog: Goldman Sachs Sacked by Computer Programmer
Bill Singer is an outspoken critic of ineffective regulation and an advocate for Wall Street reform. Singer provides legal counsel to securities-industry firms, registered persons, whistleblowers and defrauded investors. He has represented clients before regulatory organizations, during criminal investigations, and in Congressional investigations. Singer is the Street Legal columnist for Registered Rep. magazine; a featured columnist for Forbes.com; and a member of the Forbes Intelligent Investing All-Stars Panel. He regularly appears as a commentator on television and radio, and is frequently quoted in the press. Since 1989, Singer has been affiliated with law firms as a partner/shareholder whose private practice focuses on securities-industry matters. He is presently a shareholder in the Securities Practice Group of the law firm of Stark & Stark (offices in New York: New York City; in Pennsylvania: Philadelphia and Newtown; and New Jersey: Marlton and Lawrenceville/Princeton). Follow the link to view Bill Singer's complete resume. Bill Singer is a syndicated featured columnist for Corporate Compliance Insights whose articles tackle issues dealing with Wall Street. Follow the link to view all of Bill Singer's articles on Wall Street and issues dealing with financial compliance.