Sunday, July 19, 2009

FBI arrests former Goldman Sachs programmer on software-theft charge

by Judy Peet/The Star-Ledger
Monday July 06, 2009, 12:01 PM

A Russian-born computer programmer from North Caldwell was arrested by the FBI at Newark Liberty International Airport and charged with trade-secret theft, authorities said.

Sergey Aleynikov, 39, a former software designer for Goldman Sachs, posted 10 percent of his $750,000 bail and was released from a Manhattan jail this afternoon. He is charged with downloading propriety software from his former employer and sending secret codes to a web account in Germany, authorities said.

Aleynikov was arrested as he arrived in Newark Friday night on a flight from Chicago, He went before a federal judge in New York on Saturday.

The FBI affidavit stated that on four occasions since June 1, he used his personal passwords to download 32 megabytes of data from the Goldman Sachs servers in New Jersey.

Aleynikov resigned his job June. 5.

He told his former Goldman Sachs supervisor that he had a job with a Chicago company that also engaged in high-volume automated trading, authorities said. He said the job paid approximately three times more than he made at Goldman Sachs.

The downloads contained a program that uses "sophisticated mathematical formulas to place automated trades in the market," the FBI affidavit said. Those trades typically generate "many millions of dollars" each year.

An internal review by Goldman Sachs alleges that Aleynikov's work desktop was used at least four times after hours between June 1 and June 5 to transfer company information to the Germany-based website, the FBI said.

At the time of his arrest Aleynikov told the FBI that he had copied and encrypted files from his former employer. He claimed, however, that he only intended to collected "open source" files on which he had worked.

He said he later realized he "obtained more files than he intended." He claimed he abided by the confidentiality agreement he signed with Goldman Sachs, investigators said, and did not distribute any of the propriety software.

http://www.nj.com/news/index.ssf/2009/07/fbi_arrests_former_goldman_sac.html

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