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posted by takyon on Monday May 04 2015, @12:15PM   Printer-friendly
from the invaluable-economic-activity dept.

Former Goldman Sachs programmer Sergey Aleynikov, one of the central figures in the high-frequency trading exposé Flash Boys, has been found guilty on one count of "unlawful use of secret scientific material" for "stealing" high-speed trading code from Goldman Sachs. He was acquitted of "unlawful duplication of computer related material," and another "secret scientific material" charge may be dismissed by mid-June. He may face between one-and-a-half and four years in prison, although there is no mandatory minimum for the charge, and the judge has indicated that he is likely to be lenient.

"Aleynikov left Goldman Sachs in 2009 for a high-speed trading startup and was arrested by the FBI after he was caught downloading a copy of the firm's code to his home computer." Aleynikov's first trial resulted in a sentence of 97 months in prison for two counts of theft of trade secrets, but the conviction was overturned by the United States Court of Appeals for the Second Circuit. This time around, the State of New York charged Aleynikov. "Manhattan District Attorney Cyrus Vance called the source code that Aleynikov had copied [Goldman Sachs'] 'secret sauce'."

The case almost ended up in a mistrial due to a dispute between two jurors which led to their dismissal. One juror accused another of "food tampering" because an avocado was missing from her sandwich, and said she took a blood test to determine whether she had been poisoned. The judge called the accusations "completely unfounded," and Aleynikov's lawyer agreed to drop a request for a mistrial and proceed with a 10-member jury. Aleynikov's lawyer has until May 15 to file a motion for dismissal.

 
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  • (Score: 2) by MrGuy on Monday May 04 2015, @03:11PM

    by MrGuy (1007) on Monday May 04 2015, @03:11PM (#178530)

    I think you're missing the analogy (or maybe I am). As I interpret GP, he's trying to make the point that, if you want to replicate the results of a highly effective trader, the code for the underlying trading platform (sans models) isn't helpful, and a stale snapshot of the models is only somewhat helpful - the value a highly effective trader delivers is in constantly adjusting and changing the models and algorithms to stay ahead of the market.

    It's not that the source code for Excel is valueless (clearly it has high value). It's that having the source code to Excel (which is still the most popular tool I see in the industry for building out new financial models) doesn't actually help you replicate someone else's models BUILT on Excel. The platform by itself doesn't help you replicate someone else's results. Stealing someone's copy of Excel (or by analogy another trading platform) isn't a terribly useful operation.

    Having someone else's financial models and outputs WOULD help you replicate their results, for awhile. However, as the market adjusts and learns, models that were highly profitable at one point in time will be less effective later, so an unmaintained snapshot of someone else's models would not bring you long term value.

    The point GP was making (as I understand it) is that even IF this trader downloaded all the code to GS' platform, and all the models in use, it's still not entirely clear that he stole something that would (by the time it was used elsewhere) remain long-term useful.

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  • (Score: 0) by Anonymous Coward on Monday May 04 2015, @04:12PM

    by Anonymous Coward on Monday May 04 2015, @04:12PM (#178575)

    Actually I think we agree, or aren't far apart. The platform code that the GS allegedly stole probably *does* have high value, but the value of that code is as a long term asset. It's like the difference between a game engine, and a specific AAA game that was built using the game engine. Both can have high value.