Programmer gets 8 years for theft of stock trading software

Wall Street-ware generated $500m in profits

A former Goldman Sachs software developer has been sentenced to eight years in prison for stealing proprietary code used in the firm's high-speed trading platform.

Sergey Aleynikov worked at Goldman from 2007 to 2009 and was a programmer responsible for the firm's high-frequency trading software, which has generated more than $500 million in profit for the firm since 1999, prosecutors said. In June of 2009, he transferred “substantial portions” of the underlying code from Goldman servers to a server located in Germany. To avoid detection, he encrypted the files, deleted the encryption program, and then deleted his computer's bash history.

In July 2009, he flew to Chicago to attend meetings at Teza Technologies, a startup that was developing its own high-frequency trading platform. He was arrested a day later at Newark Liberty International Airport as he returned home. The computer he carried contained Goldman's proprietary code.

A naturalized US citizen who emigrated from Russia, Aleynikov had maintained he was innocent of the charges and had intended to download only open-source code from Goldman's servers. He only later realized he obtained proprietary software, he had said.

In addition to the prison sentence, Aleynikov was fined $12,500 and ordered to serve three years of supervised release. The judge in the case said the programmer deserved a lengthy sentence because “the scope of his theft was audacious.” ®