Saturday, September 12, 2009
"At 9:20 p.m. on July 3, Mr. [Michael] McSwain arrested Mr. [Sergey] Aleynikov, 39, are Newark Liberty Airport, accusing him of stealing software code from Goldman Sachs [GSG], his old employer. At a bail hearing three days later, a federal prosecutor asked that Mr. Aleynikov be held without bond because the code could be used to 'unfairly manipulate' stock prices. This case is still in its earliest stages, and some lawyers question whether Mr. Aleynikov should be prosecuted criminally, or whether a civil suit may be more appropriate. ... The profits have led to a gold rush, with hedge funds and investment banks dangling million-dollar salaries at software engineeers. In one lawsuit, the Citadel Investment Group, a $12 billion hedge fund, revealed that it had paid tens of millions to two top programmers in the last seven years. ... As Mr. Aleyniknov and other programmers have discovered, investment banks do not take kindly to their leaving, especially if the banks believe that the programmers are taking code--the engine that drives trading--on their way out. ... This spring, Mr. Aleynikov quit [GSG] to join Teza Technologies, a new trading firm, tripling his salary to about $1.2 million, according to the complaint. He left [GSG] on June 5. ... At Mr. Aleynikov's bail hearing, Joseph Facciponti, the [AUSA] prosecuting the case, said that [GSG] discovered the transfer in late June. On July 1, the company told the government about the suspected theft. Two days later, agents arrested Mr. Aleynikov at Newark. ... At Mr. Aleynikov's bail hearing, Mr. Facciponti said that simply by sending the code to the German server, he had badly damaged [GSG]. 'The bank itself stands to lose its entire investment in creating this software to begin with, which is millions upon millions of dollars,' Mr. Facciponti said. Sabrina Shroff, a public defender who represents Mr. Aleynikov, responded that he had transferred less than 32 megabytes of [GSG] proprietary code, a small fraction of the overall program, which is at least 1,224 megabytes. ... Harvey A. Silverglate, a criminal defense lawyer in Boston not involved in the case, said he was troubled that the FBI had arrested Mr. Aleynikov so quickly, without evidence that he had made any effort to use or sell the code. Such disputes are generally resolved civilly rather than criminally, Mr. Silverglate said. "It is astonishing that the FBI arrested this defendant at all', he said", my emphasis, Alex Berenson at the NYT, 24 August 2009, link:
Appropriate? GSG is the "victim" here. Boil Aleynikov in oil, without trial. Two days later. See spot. See spot run. See FBI. See FBI run. McSwain, haven't you anything important to do? Like figure out what to arrest Lloyd Blankfein for? Or John Mack? Look, you'll likely find something. "Badly damaged"? Is damage an element of a crime? Or a tort? Facciponti seems confused. Why astonished Harvey? This is GSG, not Joe Schmoe complaining GSG defrauded him. GSG looks vulnerable. If GSG's program is 1,224 megabytes, what then? Federal Rule of Evidence (FRE) 106 states, "When a writing or recorded statement or part therof is introduced by a party, an adverse party may require the introduction at that time of any other part or any other writing or recorded statement which ought in fairness to be considerd contemporaneously with it". Shroff, see "Dr. Strangelove" (1964) and mount a "doomsday" defense. Introduce all 1,224 megabytes. If I were Judge Crotty I would grant your motion. Let the jury inspect GSG's code. Why not? It's evidence. Soon the whole world will have it. Barney Frank may even look. GSG, you may have bitten off more than even you can chew here. No bail? Is Aleynikov a Cali drug cartel "capo", or Mullah Omar? Aleynikov, go to trial. Shroff, if you need money, start an Alenynikov defense fund. You might get more than you think.
GSG seems confused about its role in the SDNY's version of Rudyard Kipling's (1865-1936), 1902 children's story, "How The Rhinocerous Got His Skin". GSG claims to be the Parsee-man, Pestonjee Bomonjee and recites his sloka, "Them that takes cakes; Which the Parsee-man bakes; Makes dreadful mistakes". Now: "Them than takes code; For which Goldman is owed; Will get the DOJ's goad". No, GSG, you are Rhinocerous Strorks who, "had no manners then, and ... has no manners now, and ... never will have any manners". You want to eat it all.