Goldman Sachs Programmer Sentenced 8 Years for Intellectual Property Theft
The former Goldman Sachs computer programmer was sentenced to eight years in prison for stealing proprietary code used by the Wall Street bank's high-frequency trading system.
U.S. District Judge Denise Cote handed down a 97-month sentence, well within the eight to ten years the prosecutors had sought, and fined Sergey Aleynikov $12,500 on March 18.
The FBI arrested and charged Aleynikov in July 2009 for copying trading code from Goldman Sachs and taking it with him when he took a new job with Teza Technologies, a Chicago-based high-frequency trading startup. He was found guilty of trade secrets theft and transporting stolen property across state lines on Dec. 10 by a federal jury in the U.S. District Court for the Southern District of New York.
"I very much regret the foolish thing of downloading information," Aleynikov said at his sentencing. He claimed what he did breached Goldman's confidentiality rules and never "meant to cause Goldman any harm or harm anyone at the bank."
U.S. prosecutor Joseph Facciponti said the Aleynikov several months planning his move, eventually transferring 500,000 lines of Goldman Sachs source code to an outside server in Germany.
Aleynikov's lawyer, Kevin Marino, suggested two years would have been adequate for a "foolish, tragic, horrible, ridiculous mistake."
Cote likened his actions to "economic espionage" and said his actions were "motivated solely by greed."
She said she also wanted to send a stern message to people who don't consider intellectual property theft a serious crime. Companies suffer billions of dollars annually as employees steal intellectual property and often deploy expensive data leak prevention technologies to try to stop the thefts. Congress also passed the Economic Espionage Act to toughen penalties for those who steal.
The software Aleynikov stole powered Goldman's computer-driven trading systems that use algorithms to spot discrepancies in stock prices. Goldman earned about $300 million in 2009 through this type of trading.
Aleynikov's case comes on the heels of a similar case where Samarth Agrawal, a trader at SociÃ©tÃ© GÃ©nÃ©rale, was convicted of stealing proprietary code from its high-frequency trading business. Agrawal was sentenced in February to three years in prison, and will be deported to India after he finishes his sentence.