Citadel gets restraining order against employee it says stole data

Citadel gets restraining order against employee it says stole data

Hedge fund Citadel has been granted a temporary restraining order against an employee it says transferred "massive amounts of highly confidential" information from its computer systems to external devices.

In a complaint filed in the circuit court of Cook County, Illinois, Citadel says quantitative financial engineer Yihao Ben Pu installed unauthorised programs on its computer systems to bypass security measures before moving sensitive information relating to its tactical trading business to external devices.

The firm claims that during its internal investigation into the issue, Pu - who is being fired - has "repeatedly lied" and "purposefully destroyed evidence".

In addition, Citadel says telephone records prove that during the investigation Pu has been in contact with a rival, Teza Technologies, about job opportunities.

Teza was set up by Mikhail Malyshev, former head of Citadel's high-frequency trading business. Citadel sued Malyshev in 2009 for breaching his non-compete agreement. He was also ordered to pay $2.2 million for wiping evidence from his home computer hard drives.

Citadel only discovered Malyshev's Teza project after it emerged that Sergey Aleynikov, the man accused of stealing proprietary trading code from former employer Goldman Sachs, had been hired by the start-up.

Earlier this year Aleynikov was sentenced to eight years and one month in jail for the theft.

Pu told Crain's Chicago Business that Citadel has "overreacted" while Chris Gair, a lawyer at Jenner & Block, which represents Teza told the paper that it is not recruiting Pu, has no involvement in the alleged wrongdoing and that Citadel's naming of Teza in its complaint is part of a "continuing campaign to smear a competitor".

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