Goldman code theft suspect fights on

By Bloomberg Time of article published Apr 7, 2015

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Chris Dolmetsch New York

THE FORMER Goldman Sachs Group programmer accused of stealing the bank’s “secret sauce” beat back the federal government’s attempt to keep him in jail. Now he has decided to fight state prosecutors to clear his name.

Sergey Aleynikov, who spent almost a year in prison before his federal conviction was thrown out, was in the clear for six months before Manhattan district attorney Cyrus Vance Jr brought state charges. Vance claims Aleynikov stole Goldman Sachs’ high-frequency trading code when he left for a new job.

The Russian-born programmer denied Vance’s charges, and rejected his offer to plead guilty in exchange for not serving more time. He now faces as long as four years behind bars if convicted.

Such a second bite at the apple for prosecutors is rare, but legal. States can prosecute the same crime as the US government without triggering the ban known as double jeopardy. The exception is often reserved for the most extreme cases, such as Oklahoma City Bombing accomplice Terry Nichols, convicted by the US and Oklahoma in the 1995 terrorist attack that killed 168 people.

“It’s audacious to be taking a case like this,” said Eugene O’Donnell, a lecturer at New York’s John Jay College of Criminal Justice, of Vance’s decision to pursue Aleynikov after he escaped federal charges.

Prosecutors called the Goldman Sachs computer code the bank’s “secret sauce”. In the Aleynikov case, the second prosecution might make sense to Vance because state law was clearer than federal law when it came to technology crimes, said Bennett Gershman, a professor at Pace Law School in White Plains, New York.

The US appeals court ruling throwing out the federal conviction because the laws used were a bad fit was a “clear invitation” for Vance to step in, Gershman said. Aleynikov, whose 2009 arrest served as an inspiration for author Michael Lewis’ best-selling book Flash Boys, was the first of a group to be charged by Vance with stealing intellectual property from financial firms. – Bloomberg

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