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."

Comments

open source... Likely defence

[Anonymous Cowar]

Here's the thing, Open source or not, taking it directly from his employer was a bad idea. If you modify a piece of software for in house use and don't distribute it outside, you don't have to distribute the source. If he wanted open source software, i know of a few places where he might find copies. (no links because you should know about google and source forge by now). So, if the source code HAD to have been taken from GS's servers, then it probably had proprietary in house changes which may not be re-licensed under the gpl (the gpl is a distribution license and kicks into effect as soon as GS starts distributing). That might still be theft of in house IP, which is bad.

Anywho, in summary, weak sauce excuses are weak sauce.

Re:open source... Likely defence

[Anonymous Cowar]

So what you're saying is that he was in the right because he was impatient?

Re:open source... Likely defence

[digitalunity]

What he did was wrong, but not for the reasons you think.

Superfast trading puts all other traders at a disadvantage and essentially lets day traders manipulate the market. The SEC doesn't see fit to step in and stop the madness. They're a leech on the market and the frequency and volume of their trades hampers the ability for real investors(meaning people) to determine the volatility and legitimate trade volume of a stock.

Some day the SEC will pull their head out of their ass and put a mandatory ownership period on all stock purchases of 48 hours or something. Addicted day traders might stop gambling away their retirement and it might put an end to these fast traders.

Re:open source... Likely defence

[Dr Damage I]

In order to prove that theft has taken place, it is necessary to prove that the accused intended to steal. Or to put it another way: actus non facit reum nisi mens sit rea, which means that "the act does not make a person guilty unless the mind be also guilty". Thus, if indeed, taking the proprietary code was inadvertent, he is not guilty of theft.

Re:open source... Likely defence

[timmarhy]

fail. if it's sitting on the companys computers and you've been working on it in company time, they own it. i can't fathom a reason he would copy personal projects onto company hardware if it wasn't to work on it.

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.

Re:open source... Likely defence

[Tanktalus]

a) tell the jury that

b) how often does "but I didn't mean to steal it!" work in real-world (as opposed to academic or TV) court?

Re:open source... Likely defence

[hoggoth]

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.

Re:open source... Likely defence

[Anonymous Coward]

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.

Re:open source... Likely defence

[anarchyboy]

He wasn't actually american though apparently he was an immigrant.

Re:open source... Likely defence

[Anonymous Coward]

"if you work on it using company resources, between the hours of 9am and 5pm, the company owns it" is a standard part of employment contracts, it is NOT law. I have requested that it be removed from all employment contracts I have signed, and it was either removed or a separate document was written specifying amended terms. (in most cases the term was simply omitted, in another it was re-written to include the additional condition that they only own it if they told me to do it, which I thought was a nice touch, as the original wording had them owning any code I did at home in my spare time, too, while the new wording allowed me to work on personal projects during lunch)

If a lot of companies are in the habit of raping you, it doesn't make it "law", and there's usually something you can do about the rape part, too.

Re:open source... Likely defence

[pz]

Here's the thing, Open source or not, taking it directly from his employer was a bad idea. If you modify a piece of software for in house use and don't distribute it outside, you don't have to distribute the source. If he wanted open source software, i know of a few places where he might find copies. (no links because you should know about google and source forge by now). So, if the source code HAD to have been taken from GS's servers, then it probably had proprietary in house changes which may not be re-licensed under the gpl (the gpl is a distribution license and kicks into effect as soon as GS starts distributing). That might still be theft of in house IP, which is bad.

Anywho, in summary, weak sauce excuses are weak sauce.

Agreed. It might well be argued that knowing which open source packages were used is in itself proprietary, and therefore the mere copying of the packages from his employer, demonstrating a clear and discerning knowledge of valuable operational information, is sufficient for prosecution. Assuming he is just stupid and is not lying, he should just have waited until he was at his new job to grab the code from the original distributor (SourceForge, or wherever).

I'm disinclined to believe that the copying was innocent. A number of my friends, and my spouse, work in the financial industry, and nearly every action taken in life is scrutinized. Exiting a position, doubly so. Everyone knows this, and there is a good reason: when salaries are in the 7-digit range, people's motivations become rightfully suspect.

Re:open source... Likely defence

[Chyeld]

No offense, but they were idiots then. Why did they have CD burning capabilities in these PCs and why did they trust that the CD you handed them was the one you just burnt and you hadn't palmed one under your desk with the actual stolen code.

Re:open source... Likely defence

[genericpoweruser]

Yeah but things changed again in 2009, you're in for a surprise.

Re:open source... Likely defence

[MBGMorden]

and why did they trust that the CD you handed them was the one you just burnt and you hadn't palmed one under your desk with the actual stolen code.

Not saying they necessarily did this, but if the software was already set to kick off a warning to them, then it may very well have also included a checksum for the data burned to the CD. It wouldn't be hard to take the CD and recalc a checksum to see if it matched.

Re:open source... Likely defence

[Chyeld]

The first part would still stand, obviously any burning was unauthorized, and they still sell "read only" CD drives today.

The second part, with your jusification, would imply that they knew what was being copied and thus should have been able to simply determine that this wasn't something they cared about.

Unless they half-assed it.

Which given they appearently went to all the effort of coming up with a system to detect file copies without going the full nine yards of removing the actual ability to copy files off the system, isn't that hard to believe. But it still gives them the stupid label.

Re:open source... Likely defence

[ChameleonDave]

We both almost got fired from the shit-storm that followed. They didn't overreact one bit. We were wrong.

You appear to have a form of Stockholm syndrome.

Re:open source... Likely defence

[ChameleonDave]

Assuming he is just stupid and is not lying, he should just have waited until he was at his new job to grab the code from the original distributor (SourceForge, or wherever).

It's lovely, seeing with 20-20 hindsight, isn't it?

Re:open source... Likely defence

[AlXtreme]

Some day the SEC will pull their head out of their ass and put a mandatory ownership period on all stock purchases of 48 hours or something. Addicted day traders might stop gambling away their retirement and it might put an end to these fast traders.

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.

Re:open source... Likely defence

[codeguy007]

Because that's how dell and hp sell them. Purchasers don't care about IT security.

Re:open source... Likely defence

[benjamindees]

And the IT Dept is competent enough to monitor usage of the CD burner, but not to disable it?

Re:open source... Likely defence

[sumdumass]

If the burners were needed during the course of business, it may have been impossible to disable them without costing more in the long run.

I find it funny when people say "they should have disabled it" instead of the employee knows the rules and shouldn't have done X. I mean is it the employers fault that the employee was surfing porn at work because the sites he visited wasn't blocked by the content controls? Is it the employers fault for not putting the printing paper or pens under lock and key when the employees start taking it home for personal use? No, it's the employees fault for not following the rules. When employees cannot follow the rules, they need to become ex-employees instead of having the employer jump though hoops locking crap down.

Re:open source... Likely defence

[Saint Fnordius]

I disagree about the mandatory ownership being draconian. After all, the entire idea of acquiring ownership is that you are assuming responsibility as an owner. Buying it only to sell it minutes later implies that you really weren't interested in the company.

We need to prevent treating the exchange markets like some huge gambling casino.

Re:open source... Likely defence

[Saint Fnordius]

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.

Re:open source... Likely defence

[hoggoth]

> You appear to have a form of Stockholm syndrome

No, I have gratitude that I didn't lose my job and get a reputation for being an idiot. Because I actually was. The PC didn't have a CD burner. We plugged one in.

Mountain or molehill?

[davidwr]

Criminally negligent carelessness or a clever disguise for future criminal intent? Short of reading his mind, we may never know.

Re:Mountain or molehill?

[mwvdlee]

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?

Weird phrase

[PCM2]

Can you really "waive your rights against self-incrimination"? Like, now that he's waived his rights, he's required to incriminate himself?

Re:Weird phrase

[Trepidity]

Yeah, phrased weirdly, but I assume it means something like, "he incriminated himself even after being advised of his Miranda right to remain silent". It might mean something stronger, though, like police actively asked him if he was waiving his right not to incriminate himself, and he confirmed that he was--- police sometimes do this so that the recorded interview is absolutely clear that the suspect knew what his rights are and was consciously waiving them, rather than speaking accidentally or because he was tricked into incriminating himself.

Re:Weird phrase

[nine-times]

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."

Re:Weird phrase

[DragonWriter]

Can you really "waive your rights against self-incrimination"?

Yes.

Like, now that he's waived his rights, he's required to incriminate himself?

No, it means that once he made the waiver, the statements he made to law enforcement can be used against him in a court of law and he cannot assert his Constitutional right against self-incrimination to have those statements excluded from evidence at trial (or, at least, provided that evidence shows that he did in fact waive those rights, an attempt to do so would fail.)

Re:Weird phrase

[Zombywuf]

Or sometimes will be outside and ask to use your toilet. Let em in and bingo, rights waived.

Re:Weird phrase

[BigHungryJoe]

Wow, that's a good piece of info. You know of a case where the police did that?

Never let the cops use your toilet.

Re:Weird phrase

[digitalunity]

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

Re:Weird phrase

[CodeBuster]

For those who are interested, the Electronic Frontier Foundation has put together a Surveillance Defense Project manual which discusses the basics of government search and seizure powers in the United States (among other things). There are other sources available on the same and related topics (the searches are left as an exercise to the reader), but basically the only way to completely preserve one's rights when dealing with the authorities is to refuse any cooperation, other than name and id, from the very start and continue that refusal until one's attorney is present and one is acting under advice from that attorney. Of course, our individual rights are being constantly diminished in this country so your mileage may vary, but at least in theory if you want to protect your 5th amendment right against self incrimination you must never cooperate, not even partially, until you are acting under the advice of your attorney, even if you have not yet been arrested or detained (i.e. this applies to any interactions with the authorities under any circumstances).

Holy JESUS

[BitterAndDrunk]

$1.2m a year to PROGRAM??

I'm in the wrong industry vertical.

Re:Holy JESUS

[camperdave]

Maybe you're just at the wrong horizontal.

Re:Holy JESUS

[cptdondo]

Well, you earn it. My sister used to work on wall st; got all sorts of perks. Catered dinners and a chauffeur home when she worked late, that sort of thing. Thing is, the late nights, killer pressure, and absurdly long weeks were the norm. Me, I make probably a tenth of what she did, but I show up at 7:30 and leave at 4, and sleep at night. I have time for my kids and family. I've never worked on a weekend on this job. So yup, you can make $millions; you can also lose your soul.

Re:Holy JESUS

[Red Flayer]

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 :)

Re:Holy JESUS

[mwvdlee]

I confirm.
This girl was DEFINITELY in the right horizontal!
(And a pretty good vertical too)

Re:Holy JESUS

[Anonymous Coward]

Bullshit, your sister earned in 3 years what you do in a lifetime. 3 years aint that long.

Re:Holy JESUS

[mypalmike]

Lots of programmers work those kinds of insane hours without the $1.2 million salary. Indeed, the average game programmer does it for around $80K.

Re:Holy JESUS

[wandazulu]

It's not worth it. It's just not worth it. I have never been more miserable than when working in such an establishment. I never, ever, ever thought I could get used to being called an a-hole to my face for, well, anything...that's just how you referred to. And while the executive offices were likely very nice, I sat in a cube with ripped fabric, working under a flickering florescent light.

In addition to what others have said, insanely long hours, unbelievable pressure (I was told that if I didn't have something working in production by Sunday night that I should just assume I'm fired), I can say that in 1996 I took 3 days off: New Years, Thanksgiving, and Christmas. I worked every other day.

Not worth it. Absolutely not.

Re:Holy JESUS

[Lord Bitman]

In exchange for no days off for one year of my life, I could be paid more money than my current prospects have me making (gross) for the next 40 years?

I'll call it worth it. Where do I sign?

Re:Holy JESUS

[cptdondo]

How much is 3 years of your kids lives worths?

Re:Holy JESUS

[DahGhostfacedFiddlah]

How much is 3 years of missing 16 hours/day of your kids lives worth, versus 20 years of missing 8 hours/day?

Re:Holy JESUS

[lewiscr]

Duh, do it before you have kids. I missed the boat.

Re:Holy JESUS

[gknoy]

That's an interesting question.

My time with my son is priceless. I don't know that I could deal with not seeing him except after he'd already gone to sleep. On the other hand, being able to be financially stable for the rest of my life, my wife's life, and being able to comfortably fund my kids' education has a certain appeal, too. Being able to work less later in life, when my kids want to go backpacking, or play soccer, or go to museums, that is pretty valuable time too.

sounds fishy

[shadowofwind]

He said that he had inadvertently downloaded a portion of Goldman's proprietary code while trying to take files of open source software

Why try to take open source software instead of downloading it when you need it?

 

He said he had not used the Goldman code at his new job or distributed it to anyone else.

It sounds like maybe he wanted to keep it around for possible later reference. Not uncommon, but not innocent either.

Print sceen

[parallel_prankster]

To steal code, you print screen and save it as an image file :)

Re:Print sceen

[sexconker]

My print screen button gives me a paper printout.
As soon as I rip off the perforated guide hole strips, I'll yell at you to get off my lawn.

Public Defender

[Anonymous Coward]

$400k/year then $1.2mm and you use a public defender. Seems like someone is taking advantage of the system.

Separation

[R2.0]

Keep your personal business and your company's business separate. For instance, I have a separate banking account whose sole purpose is to hold expense reimbursements until I pay the ccard. Why? Because it's just too damned easy to screw up and cause yourself trouble all out of proportion to the original mistake.

I don't buy it.

[Anonymous Coward]

He is a developer so by definition he is computer literate; you don't "accidentally" copy the wrong files (especially since they have BASH LOGS of what he did). However, even if what he says is true WHY IN THE NAME OF FUCK would you copy Open Source Software from your development machine instead of directly from the source? The potential for the appearance of impropriety is bad enough. On top of that, according to the original Slashdot article a while back he also encrypted the files. WHY IN THE NAME OF FUCK would you bother to encrypt Open Source Software files? While everything he said is technically plausible, it just comes off as fraudulent in the same manner as Hans Reiser's defense; i.e. "I'm so smart and I have an answer for everything". I suspect the next thing we hear about this story will involve a plea deal.

Re:I don't buy it.

[avandesande]

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.

Re:I don't buy it.

[owlstead]

I don't know, if I copy my "c:\java" folder at work I end up with literally gigabytes of open source libs, API's etc. all neatly arranged. It would take quite some time to get them back. Some sources are even hard to trace, I've got a open source Java version of the linux/GNU "file" command somewhere, taken from a media server or such. Can't find it anymore. If I would copy that folder I would have some general purpose libs that I compiled myself as well. Yes, I could just take the directory tree and be done with it, but why not copy the folder minus the company libs? And after that a mistake is easy to make.

Not that I would do such a thing, (besides being unable to move this much info from my system anyway), but I could imagine that it is likely that people do such things. Hey, maybe he was even developing the O/S software. Encryption? I am so used to encrypting *any* application that I am sending out of the door that I would probably do it automatically. If only to confuse the company virus scanner.

Re:I don't buy it.

[91degrees]

He is a developer so by definition he is computer literate; you don't "accidentally" copy the wrong files (especially since they have BASH LOGS of what he did).

Complex source tree. Closed source gets muddled up with open source somehow. He forgets to exclude certain files. Easy to do.

However, even if what he says is true WHY IN THE NAME OF FUCK would you copy Open Source Software from your development machine instead of directly from the source? You have 30 different applications each doing a little job. You can either copy them all into a tarball, or hunt them down individually on the internet.

On top of that, according to the original Slashdot article a while back he also encrypted the files. WHY IN THE NAME OF FUCK would you bother to encrypt Open Source Software files?

This one comes down to "why not?". Maybe he put them into a zip and always adds a password. maybe he just copied them to an encrypted drive. I'm not sure about this one myself. I'd like some more information about how the files were encrypted.

Re:the Goldman Sachs Code is illegal front running

[Red Flayer]

Why would you be shocked?

I mean, I not a conspiracy theorist by any means, but have you looked at how many ex-Goldman Sachs employees are employed in the highest levels of the US and several state governments?

And I'm not just talking about Treasury Department appointments... also in the SEC, in elected office, etc. There's a joke I've heard that the SEC doesn't sneeze if they haven't asked GS for permission first.

At any rate, the funniest thing I've heard about the whole deal is that GS told the authorities that with this software, the guy who stole it could manipulate markets and gain an unfair advantage in trade, and disrupt global markets. And yet somehow those potentials are not possible with GS being the only part holding the software?

Wow - this seems assinine

[netruner]

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.

Re:Wow - this seems assinine

[netruner]

From the article: "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." Not to mention that 2.6% of a program (the amount he was quoted to have, including the OSS that is not proprietary) is a bit weak in my opinion.

Apparently I'm not alone (again, from the article): Harvey A. Silverglate, a criminal defense lawyer in Boston not involved in the case, said he was troubled that the F.B.I. 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.

Possession of proprietary data happens every time one of these guys leaves a company - they have it between their ears. Using it is where they get nailed. The reason I'm so surprised at the FBI is that I know they're smart enough to not spring the trap before they have the guy dead-to-rights. Failing to do that is how perps walk and I expect more from our country's premier law enforcement agency.

The stamping out part is about Citadel, not GS and certainly not the FBI. (You may want to read the article - it's a pretty quick read)

Citadel and GS are either going off half-cocked or we don't have all the pieces.

Re:The Moral Here?

[sexconker]

So "Troll -1" and "Flamebait -1" should be folded into "Offtopic -1" and "Redundant -1"?

He's an idiot

[krou]

Mr. Aleynikov waived his rights against self-incrimination, and agreed to allow agents to search his house.

He's a f*cking idiot, and probably watched too much CSI and other cop shows where they always show people talking without their lawyer. Don't talk to the police, or the FBI, or any authority without your lawyer. Doesn't matter if you are innocent, doesn't matter if you have an explanation, an alibi, whatever. Just don't do it, because you can and will say something that can be used against you in a court of law.

Interesting...

[frank_adrian314159]

The interesting part of the article is actually in paragraph 3 (i.e., before anything the submitter thought was important):

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.

Of course, it's perfectly fine that Goldman-Sachs management and traders have code that could be used to "unfairly manipulate" stock prices. But when a private citizen gets their hands on something like that, look out! God knows we wouldn't want the hoi-polloi to have the same chance to "unfairly manipulate" stock prices that the big boys have.

Re:Interesting...

[bitrex]

You might be interested in the following article detailing some of Goldman's creative business practices: http://market-ticker.denninger.net/archives/1364-America-Is-Running-Out-Of-Rope.html

No effort is spared in government to protect the dishonest business practices of these sheisters, and no effort is spared in the media to disguise it as the parent companies of the major media outlets benefit greatly from keeping the public in the dark.

Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show.

Nothing like selling bonds out the front door and shorting them on your prop desk, right? Oh wait, Goldman did that too!

Securities laws require firms like Goldman to engage in "fair dealing with customers," and prohibit analysts from issuing opinions that are at odds with their true beliefs about a stock. Steven Strongin, Goldman's stock research chief, says no one gains an unfair advantage from its trading huddles, and that the short-term-trading ideas are not contrary to the longer-term stock forecasts in its written research.

Riiiight. And I'm the Easter Bunny.

Re:Interesting...

[Shados]

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.

Dumb people write code every day

[RingDev]

I have proof!

Exception handling used for process control.
Functions with 27 exit points.
GUI threads running I/O.
Databases with tens of thousands of tables with no referential integrity.

Odds are this guy is a 110'er. "Smart" enough to copy his code. Dumb enough to do it over the network.

-Rick

Re:Dumb people write code every day

[RingDev]

TL;DR version - old military lingo from the Marine Corps

Long version -
  In the Marine Corps, you have different MOSs (Millitary Occupational Specialty). They are broken down into broad groups. In the Army/Airforce/Navy, you can get guaranteed placement in a specific MOS. In the Marine Corps you can only get a guaranteed Field.

MOS's are 4 digit codes, the first 2 digits are the field, the second two are the occupation. For instance, 03## is a grunt. Someone who is on the front lines, putting rounds down range. The second two numbers indicate if you are a basic rifleman, a machine gunner, armory, or any number of other specific jobs.

All things IT related used to be lumped into the 40## field. Whether you were an RPG coder, a DBA, a network admin, ADA flight systems coder, what ever. Just to get into the 40## you had to do pretty well on your ASVAB (Armed Services Vocational Aptitude Battery) test. The ASVAB is broken into a bunch of different parts, the important one for the 40## field though, is the General Technical score. IIRC it ranges from 0-140 or 150. You need to get a high ASVAB score to get into the 40## field, but to get into the 4067 MOS (computer programmers) you needed to have a 110 GT score or better.

They system wasn't perfect, but it ruled out most of the square peg-round hole guys. Even so, you wound up with a handful of marines in the 4067 field that still couldn't handle basic programming logic event after a 12+ week training course. Those people, the guys and gals who just barely squeaked by, were referred to as the "110ers" (one-ten-ers). Implying that they had just enough intelligence to get in above their head.

All of this is defunct now as under the start of the Bush administration the 4067 field was scrapped, all programming duties was sold off to contractors, and the 40## field was merged down to the 06## field and almost all IT work was outsourced.

-Rick

Re:the Goldman Sachs Code is illegal front running

[Fnkmaster]

It is illegal front running IF it looks at their brokerage business order flow and trades ahead of that. Do you have evidence that they are doing that? If so, you should be talking to the SEC, not posting on Slashdot.

Lots of firms implement high frequency trading strategies based on statistical probabilities of short term market movements, and order book depth analysis. These strategies are usually capital constrained, and a lot of work to implement and maintain, but can be levered up and earn a relative huge return on a modest amount of capital utilized, when implemented properly.

Of course, they can also fail to get timely execution of orders if there are 5 people going after the same trades, in which case 4 of you are likely to lose your arses. Unlike other areas, high frequency strategies are often (though not always) a winner-takes-all world where your network latency and code execution speed are measured in microseconds, not seconds, or even milliseconds.

The Quants are desperate for good coders

[MichaelCrawford]

I guess that million-dollar salary is evidence of their desperation.

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.

In Case You're Tempted To Work For A Quant

[MichaelCrawford]

A "Quant" is a quantitative investor; basically they have software that gives them a license to print money - or tries to. We have all seen the result of that practice.

It slipped my mind just now that I actually used to work for a quant myself, as a consultant. It was a futures hedge fund. That is, it would buy and sell pork belly and crude oil contracts in such a way as to... print money.

• Self-Employment: Even on a Good Day Things are Hard

The guy who owned the fund is the richest person I have ever met, or am ever likely to meet. Yet they tried to stiff me out of my last month's paycheck, and wouldn't pay me unless I removed from my homepage what their directory of research said of me: "Your code is by far the best in our codebase."

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.

Re:In Case You're Tempted To Work For A Quant

[dkleinsc]

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.

Re:Copyright law applies to internal distribution

[genmax]

That analogy is, unfortunately, wholly incorrect.

The GPL requires you to distribute the source code to everyone you give the binary. If you do not distribute the binary but keep it in house, there is nothing that forces you to hand out any changes you've made to the source.

This isn't even a loophole in the GPL, this is in there by design --- if I "buy" GPL software from someone, I own it --- I am free to modify it in any way I see fit, and unless I'm seeking to profit by re-selling it, I have no further obligations to the person gave or sold me that software.

They Did

[sanman2]

They did, well after they had offloaded their stakes.

Missing the point by a light year

[sgt_doom]

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).

Re:Copyright law applies to internal distribution

[mabhatter654]

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.

Finally, INTELLIGENCE!

[sgt_doom]

Thank you, Good Citizen pod, you are outstandlingly, enlightenly correctimondo--- corect, correct, correct.

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....