Sergey Aleynikov

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Sergey Aleynikov
Born Russia
Residence United States
Nationality Russia and United States
Occupation Programmer
Employer Self-employed
Website
aleynikov.org

Sergey Aleynikov is a former Goldman Sachs computer programmer. He emigrated from Russia to the US in 1990. In December 2010 he was wrongfully convicted of two counts of theft of trade secrets and sentenced to 97 months in prison. In February 2012 his conviction was overturned by the United States Court of Appeals for the Second Circuit that entered a judgement of acquittal, reversing the decision of the District court.

Career

Sergey Aleynikov immigrated to the United States in 1990. From December 1998 to April 2007, he served as the director of Routing R&D division of IDT Corporation.[1]

He authored a telecommunications patent[2] and contributed to a number of open source Erlang projects.[3] He also published several CPAN modules.[4]

Aleynikov was employed for two years, from May 2007 to June 2009, at Goldman at a salary of $400,000.[1] He left Goldman to join Teza Technologies, a competing trading firm which offered to triple his pay.[5]

In May 2010, Aleynikov founded Omnibius, LLC, a consulting services for financial clients.[1]

Arrest, trial and acquittal

On July 3, 2009, he was arrested by FBI agents at Newark Liberty International Airport after Goldman raised the alarm over a suspected security breach. He was accused by the FBI of improperly copying computer source code that performs "sophisticated, high-speed and high-volume trades on various stock and commodity markets", as described by Goldman. According to Assistant United States Attorney Joseph Facciponti, "the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."[6] Aleynikov acknowledged downloading some source code, but maintained that his intent was to collect open-source code.

In June 2010, Aleynikov filed a motion in the Federal Court to dismiss the indictment for failure to state a claim. He argued that the acts he was accused of didn't constitute a crime. The Federal Judge Denise Cote dismissed one charge against him but denied the rest of the motion by disagreeing with his plain reading of the statutory language.

In December 2010 Aleynikov had a jury trial in the United States District Court for the Southern District of New York, where the courtroom was sealed to public access several times. On 10 December he was convicted of the two counts of theft of trade secrets and transportation of stolen property.[5] Later he was sentenced to 97 months in prison, three years of supervised release following his prison sentence, and a $12,500 fine, despite the recommendation of the Federal Probation Service of suggesting a 24 month sentence.[7]

Three weeks before sentencing, Aleynikov was incarcerated on request of the government, as he was judged to be more of a flight risk after separating from his wife.[8]

In March 2011, Aleynikov appealed the conviction, asking the Second Circuit to review the District Court's decision denying his original motion to dismiss the indictment for failure to state a claim.[9]

On February 16, 2012, the United States Court of Appeals for the Second Circuit heard oral argument on his appeal and, later that same day, unanimously ordered his conviction reversed and a judgment of acquittal entered, with opinion to follow.[10] Aleynikov was released from custody the next day.

On April 11, 2012, Dennis Jacobs, Chief Judge of the United States Court of Appeals, published a unanimous decision in a written opinion[10] stating:

On appeal, Aleynikov argues, inter alia, that his conduct did not constitute an offense under either statute. He argues that: [1] the source code was not a "stolen" "good" within the meaning of the NSPA, and [2] the source code was not “related to or included in a product that is produced for or placed in interstate or foreign commerce” within the meaning of the EEA. We agree, and reverse the judgment of the district court.[9]

In the course of these events, Aleynikov has spent 11 months in prison. Aleynikov has divorced, lost his savings, and his career is ruined.[11]

The government did not seek reconsideration of the Second Circuit's ruling, thus ending federal action against Aleynikov.[12]

Later, on December 18, 2012, the law was changed by Congress, in order to punish acts like the ones Aleynikov committed in future rulings, in a law referred to as the "Theft of trade secrets clarification act of 2012".[13]

New charges by the state of New York

On August 9, 2012, Aleynikov was re-arrested and charged by Manhattan District Attorney Cyrus Vance, Jr.[14] on behalf of New York state, with the offenses of "unlawful use of secret scientific material" and "unlawful duplication of computer related material"[15] based on the same conduct. The state prosecution was initiated based on a signed complaint by the same federal agent, McSwain, who led the investigation of the failed federal prosecution. Aleynikov's lawyer, Kevin Marino, accused Goldman Sachs of being behind the government's aggressive prosecution of Aleynikov, and he sharply criticized the Manhattan District Attorney's office for charging Aleynikov after his federal conviction had been overturned and he had already served a year in prison.[16]

On September 27, 2012, Aleynikov pled not guilty to both state charges[17] and rejected the prosecutors' plea offer of accepting a single count offense and serving no jail time. On April 5, 2013, Aleynikov lost his motion to dismiss based on double jeopardy. In rendering the decision, New York State Supreme Court Justice Ronald Zweibel stated that Aleynikov's acquittal in federal court only precluded the federal government from retrying Aleynikov. The state of New York, as a separate sovereign, could continue pursuing charges against Aleynikov.[18]

References

  1. ↑ 1.0 1.1 1.2 "Serge Aleynikov". LinkedIn. Retrieved August 10, 2012. 
  2. ↑ "Patent application title: Strategic Telecom Optimized Routing Machine"
  3. ↑ ØMQ: Mission Accomplished
  4. ↑ Search Results for "Sergey Aleynikov"
  5. ↑ 5.0 5.1 Peter Lattman (December 10, 2012). "Former Goldman Programmer Found Guilty of Code Theft". The New York Times. Retrieved August 10, 2012. 
  6. ↑ David Glovin and Christine Harper (July 6, 2009). "Goldman Trading-Code Investment Put at Risk by Theft (Update3)". Bloomberg. Retrieved August 10, 2012. 
  7. ↑ Bill Singer (March 22, 2011). "Former Goldman Sachs Programmer Sentenced in Federal Criminal Case". Forbes. Retrieved August 10, 2012. 
  8. ↑ Peter Lattman (March 2, 2011). "Judge Unexpectedly Imprisons Ex-Goldman Programmer". The New York Times. Retrieved August 10, 2012. 
  9. ↑ 9.0 9.1 "United States v. Aleynikov". United States Court of Appeals for the Second Circuit. April 11, 2012. Retrieved August 10, 2012. 
  10. ↑ 10.0 10.1 Kim Zetter (April 11, 2012). "Code Not Physical Property, Court Rules in Goldman Sachs Espionage Case". Wired. Retrieved August 10, 2012. 
  11. ↑ Goldman vs. the Programmer: Bad News All Around, BusinessWeek, February 22, 2012
  12. ↑ "Government not filing a petition for rehearing". U.S. Department of Justice. May 29, 2012. 
  13. ↑ [http://thomas.loc.gov/cgi-bin/query/z?r112:H18DE2-0051: THEFT OF TRADE SECRETS CLARIFICATION ACT OF 2012 -- (House of Representatives - December 18, 2012)]
  14. ↑ "Former Goldman Sachs Programmer Charged With Illegally Taking Proprietary Computer Code" (press release). August 9, 2012.
  15. ↑ "Sergey Aleynikov, Goldman Programmer Accused Of Code Theft, Faces New Charges". Reuters. August 9, 2012. Retrieved August 10, 2012. 
  16. ↑ Pater Lattman (September 27, 2012). "Lawyer for Ex-Goldman Programmer Criticizes Prosecutors and Firm". New York Times. 
  17. ↑ "Ex-Goldman programmer rejects plea deal with NY—lawyer". Reuters. September 27, 2012. 
  18. ↑ "Former Goldman programmer fails to win dismissal of code theft case". Reuters. April 30, 2013.

External links

Conviction Overturned & Complete Acquittal

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