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Goldman Sachs Programmer Sentenced to 8 Years in Prison for Code Theft

• Kim Zetter via WIRED.com
 

A former Goldman Sachs programmer convicted of stealing the bank’s high-speed trading software was sentenced Friday to eight years in prison.

Sergey Aleynikov, 41, was convicted in December of theft of trade secrets and then unsuccessfully sought to have the conviction set aside. The Russian-born Aleynikov was ordered remanded in custody until his sentencing because he was considered a flight risk.

Prosecutors had sought 8 to 10 years, while Aleynikov asked for probation.

Aleynikov worked for Goldman Sachs until June 2009 when authorities say he siphoned source code for the company’s valuable software on his way out the door to take a new job with another company. The software is used to make sophisticated, high-speed, high-volume stock and commodities trades and earns the company “many millions of dollars in profits” each year, according to prosecutors.

Aleynikov, a naturalized American citizen from Russia who immigrated to the United States in 1991, earned nearly $400,000 a year as a vice president with Goldman Sachs, but his new job with Teza Technologies would have paid him about $1.2 million. He was arrested in July 2009 at the Newark Airport in New Jersey as he returned from a trip to Chicago, where he’d met with his new employers at Teza.

Authorities alleged he stole “hundreds of thousands of lines” of source code from Goldman Sachs in the days before he left the company. They alleged that he downloaded various software from the Goldman Sachs network and transferred it to a storage website hosted in Germany before trying to erase his tracks from Goldman Sachs’ network.

At Aleynikov’s bail hearing in 2009, Assistant U.S. Attorney Joseph Facciponti called it “the most substantial theft that the bank can remember ever happening to it,” and said repeatedly that the theft constituted the company’s “entire platform” for high-speed trading.

 Goldman Sachs only uncovered the theft in late June after it began monitoring https transfers and saw a large volume of data leaving its network, according to the complaint. The company initiated the monitoring after noticing suspicious activity on the network.

Aleynikov allegedly used a script to copy, compress, encrypt and rename files, and then upload them to the server in Germany. Once the data was transferred, the program used to encrypt the files was erased, and he allegedly attempted to delete the network’s batch history showing his activity.

Prosecutors said Aleynikov made several copies of the code and had it on his laptop when he flew to Chicago to meet his new employers at Teza Technologies, though they acknowledge that a search of Teza computers uncovered no copies of Goldman Sachs’ source code.

Aleynikov acknowledged taking the code but told FBI agents he only intended to collect “open source” software files on which he had worked, and that his collection of proprietary files on his last day of work had been inadvertent. His attorneys say he never gave the proprietary files to anyone else and that the portion of proprietary code he took inadvertently was miniscule — just 32 of about 1,224 megabytes of code — and hardly constituted the company’s “entire platform.”

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