MANHATTAN (CN) – A former Goldman Sachs computer programmer faces federal criminal charges of stealing top-secret trading codes from the bank. The codes help Goldman Sachs reap millions of dollars in profits each year and gain an edge on competitors in high-volume trades, according to a government filing.
Sergey Aleynikov, a Russian immigrant, was arrested at Newark Liberty Airport and was charged with industrial espionage on the 4th of July.
The codes allegedly were stolen and uploaded to a German-based Web site registered to a person in London, according to the complaint.
The computer “platform” allows Goldman Sachs to “to engage in sophisticated, high-speed and high-volume trades on various stock and commodities markets,” the complaint states.
“The speed and efficiency by which the platform obtains and processes market data” allows the firm to apply its “top-secret” mathematical formulas to place automated trades, based on the latest market conditions, according to FBI special agent Michael McSwain, a member of the team that arrested Aleynikov at the airport.
Aleynikov worked at Goldman Sachs’ New York office from 2007 until June this year, in a team of workers responsible for improving the companies’ computer program. He told his bosses was resigning to accept a job with a new company looking to engage in high-volume automated trading, the complaint states. Goldman Sachs claims Aleynikov had signed a confidentiality agreement acknowledging that the code is owned by the firm.
In the weeks before his last day in early June, Goldman Sachs monitored Aleynikov, and on at least four occasions he uploaded “large amounts” of unauthorized data which was then transferred outside company’s computer network, according to the complaint.
Aleynikov then erased the program used to encrypt the files and unsuccessfully tried to erase the history on the firm’s computer system, the complaint states. Goldman Sachs retains a backup copy of each computer user’s history.
Agent McSwain said Aleynikov downloaded the files “to his home computer, his laptop computer and a portable memory device.” Aleynikov was arrested after returning from Chicago, where his new firm is based.
The former programmer claims the files he was caught uploading are simply “open source,” or non-secret files that he worked on, and he later realized that he obtained more files than intended, according to McSwain.
Aleynikov was arrested on Friday and was presented to U.S. District Judge Kevin Nathaniel Fox on Saturday and was charged with theft of trade secrets and transportation of stolen property in foreign commerce. He is being held until he can make bail, which was set at $75,000 in cash and $750,000 bond, according to a spokeswoman in the U.S. Attorney’s Office.
Aleynikov has lived in the United States for more than a decade. Officials he frequently travels to his native Russia. He studied applied mathematics at the Moscow Institute of Transportation Engineering before earning a bachelor’s degree in computer science and a master’s of science degree from Rutgers, where he later served as a teaching assistant, according to his profile on LinkedIn. His profile touts himself as VP of Equity Strategy for Goldman Sachs and claims he was lead developer of the company’s “high-frequency trading platform.”