Manhattan District Attorney Cyrus R. Vance, Jr., today announced the arrest and arraignment of SERGEY ALEYNIKOV, 42, on a felony complaint charging him with accessing and duplicating a complex proprietary and highly confidential computer source code owned by Goldman Sachs, a New York-based financial institution. ALEYNIKOV, a former computer programmer for Goldman Sachs, was charged in New York County Criminal Court with Unlawful Use of Secret Scientific Material and Unlawful Duplication of Computer Related Material[1].
“This code is so highly confidential that it is known in the industry as the firm’s ‘secret sauce,”’ said District Attorney Vance. “Employees who exploit their access to sensitive information should expect to face criminal prosecution in New York State in appropriate cases.”
According to the complaint and statements made on the record in court, ALEYNIKOV was employed by Goldman Sachs as a computer programmer from 2007 until 2009. His job responsibilities included developing and maintaining computer programs used to operate the bank’s high-frequency trading system, which allowed Goldman Sachs traders to make a large volume of trades in securities, commodities, and options based on trading decisions executed in fractions of a second. Trades are executed on the basis of algorithms that incorporate data from rapid market developments and past trades. Goldman Sachs’ programmers created its high-frequency trading system to maintain a competitive advantage.
In April 2009, ALEYNIKOV gave notice of his intent to quit his job at Goldman Sachs. The defendant had accepted a job offer from Teza, a trading firm in Chicago, where he was to be responsible for developing a high-frequency trading system to compete with Goldman Sachs.
According to the complaint, on June 5, 2009, ALEYNIKOV’s last day of work at Goldman Sachs, he copied and transferred hundreds of thousands of lines of source code for Goldman Sachs’ high-frequency trading system to a foreign server. This source code included trading algorithms used to determine the value of stock options.
Senior Investigative Counsel Joanne Y. Li is prosecuting the case under the supervision of Assistant District Attorney David Szuchman, Chief of the Cybercrime and Identity Theft Bureau. Supervising Rackets Investigator Robert Muldoon, Senior Rackets Investigator Jason Malone, Senior Cybercrime Analyst Jeremy Apple, and Cybercrime Analyst Bret Rubin also assisted in the investigation.
District Attorney Vance thanked Supervisory Special Agent Michael McSwain of the FBI’s New York Field Office.
District Attorney Vance also thanked Goldman Sachs for its assistance and cooperation in the investigation.
Defendant information:
SERGEY ALEYNIKOV, D.O.B. 2/6/1970
West Orange, NJ
Charges:
Unlawful Use of Secret Scientific Material, a class E felony, 1 count
Duplication of Computer Related Material, a class E felony, 1 count
[1]The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
“This code is so highly confidential that it is known in the industry as the firm’s ‘secret sauce,”’ said District Attorney Vance. “Employees who exploit their access to sensitive information should expect to face criminal prosecution in New York State in appropriate cases.”
According to the complaint and statements made on the record in court, ALEYNIKOV was employed by Goldman Sachs as a computer programmer from 2007 until 2009. His job responsibilities included developing and maintaining computer programs used to operate the bank’s high-frequency trading system, which allowed Goldman Sachs traders to make a large volume of trades in securities, commodities, and options based on trading decisions executed in fractions of a second. Trades are executed on the basis of algorithms that incorporate data from rapid market developments and past trades. Goldman Sachs’ programmers created its high-frequency trading system to maintain a competitive advantage.
In April 2009, ALEYNIKOV gave notice of his intent to quit his job at Goldman Sachs. The defendant had accepted a job offer from Teza, a trading firm in Chicago, where he was to be responsible for developing a high-frequency trading system to compete with Goldman Sachs.
According to the complaint, on June 5, 2009, ALEYNIKOV’s last day of work at Goldman Sachs, he copied and transferred hundreds of thousands of lines of source code for Goldman Sachs’ high-frequency trading system to a foreign server. This source code included trading algorithms used to determine the value of stock options.
Senior Investigative Counsel Joanne Y. Li is prosecuting the case under the supervision of Assistant District Attorney David Szuchman, Chief of the Cybercrime and Identity Theft Bureau. Supervising Rackets Investigator Robert Muldoon, Senior Rackets Investigator Jason Malone, Senior Cybercrime Analyst Jeremy Apple, and Cybercrime Analyst Bret Rubin also assisted in the investigation.
District Attorney Vance thanked Supervisory Special Agent Michael McSwain of the FBI’s New York Field Office.
District Attorney Vance also thanked Goldman Sachs for its assistance and cooperation in the investigation.
Defendant information:
SERGEY ALEYNIKOV, D.O.B. 2/6/1970
West Orange, NJ
Charges:
Unlawful Use of Secret Scientific Material, a class E felony, 1 count
Duplication of Computer Related Material, a class E felony, 1 count
[1]The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
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