Sealed Courtroom Sought in High-Speed-Trading Code-Theft CaseThe full article can be found here
By Kim Zetter -Threat Level Privacy, Crime and Security Online
Federal prosecutors in Manhattan have asked a judge to seal the courtroom in an upcoming corporate-espionage trial to protect the secret of Goldman Sachs’ controversial high-speed trading software.
Prosecutors in the Southern District of New York asked the judge last week to close the courtroom (.pdf) for portions of testimony involving the company’s proprietary software, and to seal exhibits and transcripts pertaining to the company’s trade secrets.
The case involves a Russia-born programmer who worked for Goldman Sachs until last year when authorities say he siphoned source code for the company’s valuable software on his way out the door. 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.
Sergey Aleynikov, 40, 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 a competing firm, Teza Technologies. After Aleynikov cooperated with agents and allowed searches of his computers and home, he was indicted seven months later on charges of unauthorized computer access, theft of trade secrets and interstate and foreign transport of stolen property. He’s scheduled to go on trial November 29.
Prosecutors wrote that if information about the investment bank’s software were made public “the very purpose of this trade-secret prosecution would be defeated and other victims of trade-secret thefts would be discouraged from reporting those crimes.” The Wall Street Journal reported first about the motion to seal.
In their motion, prosecutors also asked that evidence and arguments about the nation’s financial crisis not relevant to the case be excluded from the trial.
Specifically, prosecutors asked that information about Goldman Sachs’ receipt of funds from the government’s bank bailout program be excluded, as well as information about the company’s bonus pool, bonuses and salaries paid to Goldman Sachs employees other than programmers relevant to the case. They also want civil and regulatory proceedings involving Goldman Sachs to be precluded, and information about SEC investigations of, and proposed regulation of, high-frequency trading.
High-speed trading software has been in the crosshairs since a recent SEC investigation found that trading algorithms were responsible in part for a drastic one-day stock-market crash last May.
Prosecutors asserted in their motion that “the legality of high-frequency trading is not an issue here.”
The video below from The Truth is Contagious site talks briefly about the secrets Goldman Sachs is protecting.
The video is located here