Legal News

Goldman Sachs Code-Stealer Hit With Harsh Sentence

By Ashby Jones

When last we checked in on Sergey Aleynikov, the former Goldman Sachs computer programmer convicted of stealing the confidential source code of Goldman’s high-speed trading system, prosecutors were debating with his lawyers over his sentence.

Prosecutors were arguing for 10 years, while Aleynikov’s lawyer was asking for probation — no jail time at all.

Well, the sentence came down Friday afternoon — and the prosecutors, well, won. U.S. District Judge Denise Cote sentenced Aleynikov to more than eight years behind bars.

“I very much regret the foolish decision to download information, part of this information was proprietary to Goldman,” Aleynikov said before sentencing. “I never meant to cause Goldman any harm. I did not intend to harm anyone.”

However, Judge Cote didn’t agree. “He knew that what he was doing would harm Goldman Sachs. There is no other impact,” she said. Click here for Chad Bray’s story in the WSJ.

Aleynikov was convicted of theft of trade secrets and transportation of stolen property in December.

Kevin Marino, Aleynikov’s lawyer, had previously argued that Aleynikov only intended to use portions of the downloaded code that were “open source,” or freely available.

But on Friday, Marino was singing a slightly different tune: “He made a tragic mistake,” he said. Marino said, however, that Aleynikov plans to appeal his conviction.

Mr. Aleynikov is the second person to be convicted in recent months of stealing proprietary computer code related to an investment bank’s high-frequency trading business.

Samarth Agrawal, a former Société Générale SA trader, was sentenced to three years in prison in February for the theft of the French investment bank’s computer code. He was convicted in November of theft of trade secrets and transportation of stolen property.

Full post as published by Law Blog - WSJ.com on March 18, 2011 (boomark / email).