30 August 2016
Find out more

FBI nabs programmer accused of stealing trading code

06 July 2009  |  10871 views  |  3 digital fingerprints

A Russian computer programmer has been arrested by the FBI, accused of stealing proprietary trading code from the New York-based financial institution he used to work for.

According to an FBI affidavit, Segey Aleynikov copied proprietary code relating to the financial institution's platform for high speed, high volume stock and commodities trading, before uploading it to a server in Germany.

Aleynikov worked at the unnamed firm - which according to Reuters columnist Matthew Goldstein is Goldman Sachs - from May 2007 until June 2009 as a computer programmer in a team responsible for, among other things, developing and improving the platform.

The FBI says Aleynikov quit his $400,000 a year job last month, moving to a new company in Chicago that "intended to engage in high-volume automated trading" and that paid him around three times his old salary.

In June, whilst monitoring the uploads of data from its computer system via https, the financial institution noticed that Aleynikov's work desktop was used at least four times to transfer a total of 32 megabytes of information to an external Web site.

The bank then managed to recover a record of commands entered in the accused's desktop, known as a "bash history", relating to the Unix-based operating system used to edit and maintain code associated with the platform.

Aleynikov was arrested on 3 July as he got off a flight at Newark Airport and has since been processed on a "theft of trade secrets charge" in a criminal complaint.

The affidavit says he gave a statement confirming he copied the encrypted files from the firm's server and uploaded them to the Web site before deleting the encryption software and bash history and moving the files to his own computers.

However, Aleynikov claims he only intended to take open source files, not realising until later that he had also copied proprietary code, which he insists he has not given to anyone else.

The financial institution involved has spent million of dollars on the platform and accompanying programs, which it believes gives it a "competitive advantage among other firms that also engage in high-volume automated trading".

The FBI affidavit says the bank believes that if its competitors got hold of the platform, its ability to profit from the speed and efficiency it offers "would be significantly diminished".

Update

According to Reuters, Aleynikov has had bail set at $750,000 by US Magistrate Kevin Nathaniel Fox in Manhattan.

Comments: (3)

Matt White
Matt White - Finextra - Toronto | 06 July, 2009, 16:52

Here's a YouTube video of the criminal mastermind...ballroom dancing:

http://www.youtube.com/user/saleyn

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Paul Penrose
Paul Penrose - Finextra - London | 07 July, 2009, 15:44

Sergie also has a rather detailed profile on LinkedIn: www.linkedin.com/in/aleynikov.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Aldon Hynes
Aldon Hynes - Toomre Capital Markets - Woodbridge CT | 08 July, 2009, 13:16

It seems as if this story has many interesting issues to explore around data security and transportation of data across the Internet to computers in different countries.  However, much of the coverage in the main stream media seems to focus on issues of the programmer being Russian, the allure of 'trade secrets' and 'proprietary trading'.  For a much different take on the story, I would encourage people to read my personal blog post (which is VERY long) at

http://www.orient-lodge.com/node/3642

I would love to hear other people's thoughts on this case.

Aldon

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Two found guilty in £229 million Sumitomo spyware fraud case

Two found guilty in £229 million Sumitomo spyware fraud case

04 March 2009  |  10252 views  |  1 comments
Fannie Mae IT contractor indicted for planting malware bomb

Fannie Mae IT contractor indicted for planting malware bomb

30 January 2009  |  5697 views  |  0 comments
Former Lehman IT exec takes top tech spot at FBI

Former Lehman IT exec takes top tech spot at FBI

11 December 2008  |  4667 views  |  0 comments
UBS 'logic bomber' gaoled for eight years

UBS 'logic bomber' gaoled for eight years

14 December 2006  |  6138 views  |  0 comments

Related company news

 

Related company information

Goldman Sachs
Visit equens.comFind out moreVisit VocaLink.com

Top topics

Most viewed Most shared
India's Unified Payments Interface goes live with 21 banksIndia's Unified Payments Interface goes li...
9204 views comments | 23 tweets | 26 linkedin
R3 blockchain consortium sheds light on Concord projectR3 blockchain consortium sheds light on Co...
6652 views comments | 14 tweets | 14 linkedin
Cultural change crucial in digital transformationCultural change crucial in digital transfo...
6595 views comments | 11 tweets | 10 linkedin
Mondo becomes MonzoMondo becomes Monzo
6372 views comments | 14 tweets | 9 linkedin
hands typing furiouslyBlockchain: Some Remarkable Announcements!
6033 views 0 | 5 tweets | 14 linkedin

Featured job

Find your next job