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Goldman Sachs Code Theft Not Quite So Cut and Dried
The New York Times has some interesting details that are surfacing about the recent charges brought against Sergey Aleynikov, the programmer who allegedly stole code from Goldman Sachs on his way out the door to another job. "This spring, Mr. Aleynikov quit Goldman to join Teza Technologies, a new trading firm, tripling his salary to about $1.2 million, according to the complaint. He left Goldman on June 5. In the days before he left, he transferred code to a server in Germany that offers free data hosting. [...] After his arrest, Mr. Aleynikov was taken for interrogation to F.B.I. offices in Manhattan. Mr. Aleynikov waived his rights against self-incrimination, and agreed to allow agents to search his house. He said that he had inadvertently downloaded a portion of Goldman's proprietary code while trying to take files of open source software — programs that are not proprietary and can be used freely by anyone. He said he had not used the Goldman code at his new job or distributed it to anyone else, and the criminal complaint offers no evidence that he has."
$400k/year then $1.2mm and you use a public defender. Seems like someone is taking advantage of the system.
For GS, he was making approx 400k. That's not outlandish for the kind of optimized programming on optimized hardware required for automatic trade execution, which is highly time-sensitive.
:)
But it's not just the programming skills that demand that much pay. There's lots of specialized knowledge, and some ability that likely you or I are not capable of[1].
1.2 MM for a different company? Likely the extra $800k was for the inside knowledge of what GS was doing.
[1] I don't know what your abilities are. But given my own geek-normal tendencies to overestimate my own abilities, I think it's quite possible that others do the same
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Well it's a bit weird in the wording, but it makes sense. The "right against self-incrimination" is spelled out in the 5th amendment, which includes the text, "nor shall be compelled in any criminal case to be a witness against himself". This is the part that makes it so police have to tell you that you have the right to remain silent. You can, however, waive that right and talk to the police anyhow, thereby "waiving your right against self-incrimination."
I vote for "clever disguise", but only because "stupid disguise" was not given as an option.
Why would a developer who's apparently worth US$ 400,000.- copy open source sourcecode from his employer's code repository whilst he could have just as easily copied the exact same code from the actual origin? Can anybody tell me a good reason why his claimed actions are in any way preferable to the obvious way of obtaining the source code?
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No evidence of wrongdoing has really been presented. The article (I did RTFA) seemed to say that because some files went out, the company immediately began legal proceedings without even knowing what they were. It seems like PHBs are declaring what the "valuable" files are. I'm also shocked the way the FBI has handled this - there has to be more than we're seeing.
Having said all of that - it does look like (at least the article makes it look this way) the established firms are manipulating the legal system to prevent new competitors from getting on their feet. Slap suits used to be civil only - I would think that attempting criminal slap suits would have some legal consequences for the one filing the false (or should have known they were false) charges.
DISCLAIMER: This post was not checked for speling and grammar- if you complain- you're a whiner
If I had to pick the most likely explanation, this is it. I'm probably one of the few folks here that knew/know Serge. I think this was probably a stupid mistake. He very well may have taken prop code that he wrote, with the intention of more reference than anything else. He knew he was doing something fishy, though, seeing how he encrypted the data and tried to cover his tracks (and was thwarted by PowerBroker).
Or sometimes will be outside and ask to use your toilet. Let em in and bingo, rights waived.
If you can read this you've gone too far.
So what? Regardless of what his intentions were if he didn't sell or give away the code to anyone he didn't commit a crime.
love is just extroverted narcissism
this is something that scares me a bit about the work i do. i've had employers get really pissed off at me leaving before, my greatest fear is that one day they might pursue me in this kind of manner out of spite. a perfect example was one of my early gigs - a fully automated laboratory system that ran linux. i developed it, supported it 24/7 and saved the company a fortune. in 3 years they never gave me a single pay rise. so i was forced to leave to better my financial situation, and my god my last 2 weeks consisted of snide remarks and petty shots at my work. I handled it by just going about my work as normal and tieing up as many loose ends as possible, not taking the bait at their attempts at rattling me. once my notice was up i offered them a very fair rate if they ever wanted me back as a contractor to fix things or do new developements, and it was turned down without even a moments consideration.
the fearful part comes from how much work i took home with me, a really committed employee who enjoys his work will tend to wrap his life around his work. at that time it would have been hard to separate personal life from work. i don't think anyone should be penalised for that.
If you mod me down, I will become more powerful than you can imagine....
I used to work at Lehman Brothers years ago. I was developing new trading software. Once a buddy brought me a PC game. He put a CD in a drive, copied the files to his PC and burned it to a new blank CD.
The network admins got an alert from the CD burning and within 15 minutes security was making sure nobody entered or left the section we were in. We both almost got fired from the shit-storm that followed. They didn't overreact one bit. We were wrong. We were being paid good money to know better than to copy our personal files on the same network as proprietary company software. It was a good thing they reacted so quickly so we could hand them both CDs to prove we hadn't been stealing the company's proprietary competitive advantage to sell it to a competitor. That kind of inter-company espionage goes on ALL THE TIME.
- For the complete works of Shakespeare: cat
I work for a linux vendor that does business in the finance industry, and you would be amazed at how many patches for software come through these firms. Of course it never appears that way, because the code is copyright Goldman or Morgan or whatever, and it can't be licensed under the GPL without jumping through a million hoops. The Lawyers don't get it, so people in the field wind up sending the patches out email and stuff. Technically any of these people could get picked up the same way.
That's not to say that he is innocent. As TFA states there is a large "firewall" between proprietary code and OSS code, and it is highly unlikely that he accidentally copied over core market trading code with some random OSS project. And I dispise his use of OSS as a scapegoat, because of all the resulting FUD.
At least every day for the past three or four years I've gotten inquiries from recruiters for Solomon-Page and Bloomberg, and occasionally other New York City investment firms. They specifically want C++ coders, which is what I'm best at.
If I respond at all, it's to say that I don't want to live in new york city.
However, the last time any of them named a specific salary potential was back in 2002 or so. I guess the pay scale has increased since then.
My theory is that they're hoping that some manner of Software Magic is going to fix all their fux0r3d mortgage-backed securities lossage. If one could really do that with quantitative investment software, then one would earn such a collosal salary, but I would hate to have to live with all the pressure they would be putting on me.
Request your free CD of my piano music.
Unless of course it's a password to your laptop that the police want. Then you can go to jail for not providing it apparently.
http://arstechnica.com/tech-policy/news/2009/03/court-self-incrimination-privilege-stops-with-passwords.ars
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
How much is 3 years of missing 16 hours/day of your kids lives worth, versus 20 years of missing 8 hours/day?
Last post!
people who work for companies like Goldman, JPMorgan, Morgan Stanley, and others are -heavily- audited and regulated, from the trader right down to the IT guys, to avoid any form of abusing or insider trading. Of course, Im sure they miss some, but its very, very strict.
Once you don't work for them anymore and aren't part of the audit procedures, you become a lot more dangerous.
Perhaps. But don't forget that those day traders are making the market makers a lot of money. Each trade they make, the intermediary gets a cut. If you curb fast trading, you will seriously hurt quite a few companies that make most of their cash thanks to these fast traders. I don't think the SEC would want that to happen.
Also, the question is if fast traders are really as malignant as you claim them to be. They do have different objectives than long-term investors (like we both probably are), but as long as they play by the rules and don't put out rumors and false info I personally don't have a problem with them.
If the SEC did put a mandatory ownership for a number of days it would seriously harm the market, while probably creating a large unregulated options market. Not going to happen as long as the US is waving the banner of capitalism.
This sig is intentionally left blank
I think everyone (or almost everyone) is missing the larger point here. This software, from Goldman Sachs, is what they are using to get the jump on everyone as part of their HFT (high frequency trading gambit). What they are doing is technically fraudulent and illegal, which was why they used their extraordinary influence with the US Government - which they, and the rest of the banksters now officially own - to IMMEDIATELY have Sergey arrested.
Also, all the Euro papers and blogs I perused stated that the code was originally uploaded to a server in London, United Kingdom. Something appears amiss here (and the game is still afoot, BTW).
the GPL defines publishing as submitting the code to "outside". For the purposes of a company, internal GPL code that never leaves company owned machines is just the same as your personal modifications on your personal machine. The Company, or their IT staff, is the Owner/maintainer, so it's not considered "publishing" to push changes onto company owned desktops or servers.
This is how Google keeps gobs of Linux customizations they make living on the GooglePlex pushing out google searches but the code never leaves Google's servers so it's not "published".... the Affero GPL is one of the licenses that adds clauses for webpages/ server side packages that the link to code must be visible from the network application ..GPL3 has a provision to include "about this code" links but it's not mandatory.
Goldman Sachs alumni also found at World Bank and IMF, as well as at least ten people in the Obama Administration (probably even more than that).
GS doesn't have a statistically impossible earnings record with HFT because they are smart, it's called cheating..cheating...cheating....what they have always excelled at. Didn't anyone read Matt Taibbi's outstanding article in the Rolling Stone mag the other month? Geez, they have their hardware positioned exactly right to make a killing -- no brains involved -- plus they own all the frigging exchanges (via a series of holding companies, 'natch). You others here, catch a clue, doods....
I just violated my termination contract by telling you that. Fuck 'em - I shouldn't have had to sign that contract just to get the paycheck they owed me anyway.
If you were an employee (not a contractor), you probably didn't. In most states withholding pay like that is illegal.
I am officially gone from
I believe fast traders are malignant as they do not add to the health of the company being traded, and instead siphon off capital that could have been invested in that company. They are gamblers, not investors. Your concentrating on the investors ignores the fact that the market is supposed to promote a healthy investment climate for businesses, not be a get rich quick scheme.
Assume that an unregulated marked does spring up, though: how would it be different from an unlicensed betting parlour? Normal investors would shy away from it as it would be a real shark pool with no protections. The whole point of a regulated exchange market is to ensure that the trade is fair.