MANHATTAN (CN) – Attorneys have asked for a new trial for former Goldman Sachs programmer Sergey Aleynikov, convicted last year of stealing his company’s computer code for a high-frequency trading system.
High-frequency trading software includes computer algorithms programmed to place trades as market data is processed through its system.
One Goldman Sachs witness testified that companies competing through this technology struggle to get an edge of a millionth of a second by placing computers close to the stock market.
Aleynikov’s attorneys claimed their client downloaded only open-source code for to high-frequency trading software that did not belong to Goldman Sachs.
They filed a motion for a new trial on Dec. 23, 2010. The government filed a motion in opposition on Jan. 21, 2011, and Aleynikov’s team responded on Jan. 28.
The second defense motion reiterates the arguments that Aleynikov was deprived of a public trial, that he was interrogated despite his lawyer’s objections, and that he was not allowed to attack the credibility of the FBI agent who arrested him.
Several objections refer to events that took place at the time of his arrest.
FBI Agent Michael Swain, a Goldman Sachs shareholder, arrested Aleynikov on July 1, 2009. Aleynikov was charged two days later.
Defense attorney Kevin Marino argued during summations that McSwain rushed to judgment.
In a motion filed during trial, the government sought to exclude evidence that McSwain is a Goldman Sachs shareholder. The agent’s 50 shares of stock, which prosecutors argued were too little to cause a conflict of interest, were never mentioned to the jury.
Aleynikov’s appeal says the court should not have prevented questioning about McSwain’s conversations with Goldman Sachs employees and should have barred Aleynikov’s written statements from being admitted into evidence.
“Aleynikov did not question McSwain on the adequacy of his factual investigation, even though it was highly relevant to his credibility, because the Court had previously held that he could not do so,” lead attorney Kevin Marino wrote in his most recent motion.
The original motion stated that the government “compounded this error” by not allowing the defense to cross-examine witnesses on McSwain’s investigation and by preventing the lead counsel from attacking the credibility of government witnesses.
“This undermined Aleynikov’s fundamental Sixth Amendment right to confront his accusers and denied him a fair trial,” Marino wrote.
Marino also said the court should not have admitted Aleynikov’s post-arrest statements, in which Aleynikov acknowledged downloading Goldman Sachs software but said he was only interested in open-source code.
The appeal motion states that although Aleynikov signed the statement willingly without a lawyer, he was not told at the time that the government refused his counsel’s request to cease interrogating him.
Other defense objections involved the secrecy of the case.
The government sought and was granted permission to seal the courtroom several times when discussing proprietary elements of Goldman Sachs code.
Marino wrote that that violated Aleynikov’s right to a “public trial” and “sent a damning message to the jury that Aleynikov was in fact guilty of stealing Goldman trade secrets.”
The jury also was sent out of the courtroom during the sealed testimony.
Marino wrote the jury should have been allowed to hear comments that Goldman Sachs Chief Financial Officer David Vinier made to a Reuters journalist: “We still have all of the code. It’s not like the code has been lost to Goldman Sachs. And even if it had been, it is a small piece of our business.”
The court ruled the statements were not relevant, Marino says.
Marino’s motion questioned many other rulings by U.S. District Judge Denise Cote, including her refusal to strike the testimony of an expert government witnesses, admission of evidence the defense contends was irrelevant, and denial of defense requests for sidebars.
Aleynikov’s team said that statements of Benjamin Van Vliet, an Illinois University of Technology professor who claimed that he could build a high-frequency trading platform in a day, should have been stricken from the record.
During cross examination, Marino asked if Van Vliet made that statement as a “joke,” adding, “You have never built a high frequency trading system in your life, right?”
Aleynikov’s team tried to preclude Van Vliet’s testimony before he took the stand, writing in a Nov. 14 motion that his “proposed testimony … contains nothing more than unsupported generalizations and unsubstantiated speculation.”
Marino wrote that the court should not have allowed the government to refer to a civil lawsuit that Merv Griffin Enterprises filed against Aleynikov in 1997, which ended in an injunction barring him from disseminating a video game based on “Wheel of Fortune.”
“Isn’t that beneath the dignity of a United States Attorney, with all the dignity and majesty of a federal courtroom?” Marino asked during defense summations, noting that Aleynikov is not charged with any improprieties resulting from it.
The new motion argues that Judge Cote went “beyond the bounds of judicial propriety” in allowing government sidebars while dismissing defense requests.
In its opposition motion, the government called this objection “utterly frivolous” because the judge questioned the prosecutor before granting a sidebar.
“That is precisely the point,” Marino wrote. “The Court gave appropriate consideration to (and then granted) the Government’s request, but summarily dismissed Aleynikov’s request, leaving the impression that the Government’s requests merited serious consideration while the Defendant’s did not,”
Aleynikov, 40, faces a maximum of 15 years in prison. His sentencing is set for March 18.