Former Goldman Programmer Sentenced To 97 Months

Re:how much is that in seconds? by zadintuvas · 2011-03-19 06:38 · Score: 3, Informative

255 085 152 seconds source

Shame by Anonymous Coward · 2011-03-19 06:40 · Score: 5, Insightful

It's a shame this is the only guy from GS who went to jail...

Re:Shame by KillAllNazis · 2011-03-19 06:56 · Score: 2

People are all born ignorant but stupidity must be taught.
Re:Shame by PopeRatzo · 2011-03-19 09:35 · Score: 2

So Goldman Sachs is pissed that someone that works for them stole something? Well, that's a switch.
America, how I love thee...
It's like the story of two con men who worked together on a scam, then, when they were splitting up the take, one says to the other, "You wouldn't cheat me, would you?"

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Those who should get 97 months... by dargaud · 2011-03-19 06:43 · Score: 5, Insightful

...are those who USE this algorithm.

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Re:Those who should get 97 months... by yorugua · 2011-03-19 07:33 · Score: 4, Interesting

You mean to do this: http://www.cpeterson.org/2011/03/10/why-gas-is-so-expensive-today-hint-its-not-libya/
from TFA:
in 1991, J. Aron—the Goldman subsidiary—wrote to the Commodity Futures Trading Commission (the government agency overseeing this market) and asked for one measly exception to the rules.
The whole definition of physical hedgers was needlessly restrictive, J. Aron argued. Sure, a corn farmer who bought futures contracts to hedge the risk of a glut in corn prices had a legitimate reason to be hedging his bets. After all, being a farmer was risky! Anything could happen to a farmer, what with nature being involved and all!
Everyone who grew any kind of crop was taking a risk, and it was only right and natural that the government should allow these good people to buy futures contracts to offset that risk.
But what about people on Wall Street? Were not they, too, like farmers, in the sense that they were taking a risk, exposing themselves to the whims of economic nature? After all, a speculator who bought up corn also had risk—investment risk. So, Goldman’s subsidiary argued, why not allow the poor speculator to escape those cruel position limits and be allowed to make transactions in unlimited amounts? Why even call him a speculator at all? Couldn’t J. Aron call itself a physical hedger too? After all, it was taking real risk—just like a farmer!
On October 18, 1991, the CFTC-in the person of Laurie Ferber, an appointee of the first President Bush—agreed with J. Aron’s letter. Ferber wrote that she understood that Aron was asking that its speculative activity be recognized as “bona fide hedging”—and, after a lot of jargon and legalese, she accepted that argument. This was the beginning of the end for position limits and for the proper balance between physical hedgers and speculators in the energy markets.
To look at this another way—just to make it easy—let’s create something we call the McDonaldland Menu Index (MMI). The MMI is based upon the price of eleven McDonald’s products, including the Big Mac, the Quarter Pounder, the shake, fries, and hash browns. Let’s say the total price of those eleven products on November l, 2010, is $37.90. Now let’s say you bet $1,000 on the McDonaldland Menu Index on that date, November 1. A month later, the total price of those eleven products is now $39.72.
Well, gosh, that’s a 4.8 percent price increase. Since you put $1,000 into the MMI on November 1, on December 1 you’ve now got $1,048. A smart investment!
Just to be clear—you didn’t actually buy $1,000 worth of Big Macs and fries and shakes. All you did is bet $1,000 on the prices of Big Macs and fries and shakes.
But here’s the thing: if you were just some schmuck on the street and you wanted to gamble on this nonsense, you couldn’t do it, because your behavior would be speculative and restricted under that old 1936 Commodity Exchange Act, which supposedly maintained that delicate balance between speculator and physical hedger (i.e., the real producers/consumers). Same goes for a giant pension fund or a trust that didn’t have one of those magic letters. Even if you wanted into this craziness, you couldn’t get in, because it was barred to the Common Speculator. The only way for you to get to the gaming table was, in essence, to rent the speculator-hedger exemption that the government had quietly given to companies like Goldman Sachs via those sixteen letters.
Re:Those who should get 97 months... by bmo · 2011-03-19 08:20 · Score: 2

>But what about people on Wall Street? Were not they, too, like farmers
The difference between Wall Street and the farmer next door, is that the farmer creates wealth. The Wall Street trader does not create wealth. At all. Ever.
The argument fails on its first premise. Argument is invalid.
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BMO
Re:Those who should get 97 months... by sjames · 2011-03-19 10:21 · Score: 2

100% of this could be solved with a simple rule. Each time you buy, a random number is consulted. If your number comes up, you get physical delivery, ready or not. If you don't want your swimming pool and bath tub filled with crude oil, you'd better be a legitimate buyer and not just a commodities gambler.
None of the trading actually does the economy any good at all, it judt drives up prices fro consumers while driving them down for producers while the traders skim off the top.
Re:Those who should get 97 months... by Gorobei · 2011-03-19 11:16 · Score: 2

Well, that seems rather a stupid idea, unless your plan is to shut down the market for all but the big players. Or maybe you think stuff like storage tanks cannot be rented.
Here's a hint: all the big speculators in oil also have contracts out on oil tanker leases, barges, storage facilities, etc. If you ever see a Wall St commod desk, your mind will be blown. Realtime tracking and modeling of all energy in the world: tanker locations and speeds, electrical generating facilities realtime status (yes, a firm installs magnetometers near all generators and sells the data,) and in-house meteorologists to cover short term forecasting.
Re:Those who should get 97 months... by sjames · 2011-03-19 11:46 · Score: 2

I want to shut the market down for all but actual producers, consumers, and distributors actually transporting product. The problematic speculators are not prepared to take physical delivery and then sell and deliver to someone with an actual use of the oil. If they can and regularly do, they are then distributors, not commodities speculators. They get to deal with realities like oil takes up space and food spoils if it sits in a warehouse, and that makes them behave more reasonably. Note that this includes futures. If you buy a future, you take delivery (at least if your number comes up)
If, as you claim, they're all already set up for physical delivery, then what are you complaining about?
Yes, I know storage tanks can be rented. I also know that speculators have no intention of doing so when they grab cash out of a transaction while contributing nothing of value.
Re:Those who should get 97 months... by Gorobei · 2011-03-19 12:37 · Score: 2

I want to shut the market down for all but actual producers, consumers, and distributors actually transporting product.
But how can you do that, and why would you want to? Oil prices, for example, are affected by nat gas prices, so it is not a closed system. Additionally, speculation injects capital, so the market doesn't freeze in response to short term shocks.

The problematic speculators are not prepared to take physical delivery and then sell and deliver to someone with an actual use of the oil. If they can and regularly do, they are then distributors, not commodities speculators. They get to deal with realities like oil takes up space and food spoils if it sits in a warehouse, and that makes them behave more reasonably.
But, if you try to punish speculators with random rules, firms will arb out the problem by providing one stop shopping that deals with your edge cases (for a fee, of course.) This is largely why exchanges exist in the first place: make it easy for people to transact without the messiness of physical delivery, etc.

Note that this includes futures. If you buy a future, you take delivery (at least if your number comes up) If, as you claim, they're all already set up for physical delivery, then what are you complaining about? Yes, I know storage tanks can be rented. I also know that speculators have no intention of doing so when they grab cash out of a transaction while contributing nothing of value.
My complaint is that what you are proposing (forced physical delivery) is exactly the risk that exchanges already mitigate (e.g. the London metals exchange has warehouses to handle and manage physical delivery.) There is no reasonable way to make the threat of physical delivery a barrier to trading commodities - that's a major reason why exchanges exist in the first place.
There have been numerous attempts to ban exchange trading (futures) of physical products (e.g. Japanese rice, USA commods.) These measures have never achieved anything other than to make the big market players become de facto exchanges with cartel power.

This would make sense... by MickyTheIdiot · 2011-03-19 06:47 · Score: 5, Insightful

...if all the top Goldman CEOs were put in jail for 8 years for their stunts that put the country into a major recession.

Re:This would make sense... by slick7 · 2011-03-19 07:02 · Score: 2

...if all the top Goldman CEOs were put in jail for 8 years for their stunts that put the country into a major recession.
A public execution in lieu of a football season would make everyone's day.

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Re:This would make sense... by pitchpipe · 2011-03-19 07:19 · Score: 2

Keep fucking dreaming! The only people who serve time when committing crimes in the U.S. are those without money.

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Look where all this talking got us, baby.
Re:This would make sense... by sweatyboatman · 2011-03-19 08:20 · Score: 2

Aleynikov was getting paid $400K/year and had just been hired away by another company at 3 times that salary. Nowhere near the upper echelons of wealth, but certainly not someone who could be described as "without money".
He doesn't deserve 8 years. I can't imagine Goldman really wanted this to go to trial. I wonder if his legal counsel was particularly incompetent or if he was just thickheaded enough to insist on a trial for a crime he admitted to.

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It breaks my pluginses, my precious!

Re:how much is that in seconds? by gilleain · 2011-03-19 06:47 · Score: 2

The original sentence was only 4 years, but an unfortunate combination of some faulty leap year code and Y2K errors caused a misprint on the court documents, and IT support won't help change it back...

Stool Pidgeon by cosm · 2011-03-19 06:53 · Score: 4, Insightful

How many Goldman employees went to jail for stealing taxpayer dollars?

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Re:Stool Pidgeon by countertrolling · 2011-03-19 07:36 · Score: 5, Funny

Well, if you consider a cabinet position to be like prison, quite a few

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A little crazy... by SomePgmr · 2011-03-19 06:56 · Score: 4, Interesting

Pushing the code off to a free hosting service is highly questionable, even if he claims he meant to be moving OSS and screwed up. But wow... 97 months for "interstate transportation of stolen property"? If it's still the case that he didn't use or distribute that source, and even cooperated all along... that seems awfully harsh.

Didn't actually "steal" anything by sideslash · 2011-03-19 06:59 · Score: 2

I wish we could get away from using the words "steal" and "theft" to describe making a copy of somebody's data. You could call it a copyright violation, or a violation of a legally-enforced monopoly. Both of those descriptions create a more accurate understanding for the public of what's going on than the word "stealing" does.

If you sneak into a library, take a book, and never return it, everybody would agree that you "stole" the book. But if you take home a library book, type up a copy for yourself, then return the original book to the library, would most people describe that as "stealing"? More to the point, should you go to prison for 8 years?

any goldman sachs excutives going to jail by Dan667 · 2011-03-19 07:24 · Score: 4, Insightful

for any of their abuses?

Re:any goldman sachs excutives going to jail by Colin+Smith · 2011-03-19 07:28 · Score: 3, Funny

Almost.
Their bonuses were a little smaller last year.

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Deleted

Now now by Moraelin · 2011-03-19 07:28 · Score: 4, Insightful

Now now... I know those guys are hated, and caused a global recession to line their pockets, and were giving themselves gigantic bonuses just as they were being bailed out by the government, and all, but that's no excuse to go back to barbaric times. Two wrongs don't make a right, ok? There's no reason to deprive the people of football for that.

Do what the Romans used to: have the executions at halftime :p

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Re:Now now by AK+Marc · 2011-03-19 07:42 · Score: 3, Insightful

Two men enter. One man leaves.

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Learn to love Alaska

GS is a big donor to the right people by unassimilatible · 2011-03-19 07:42 · Score: 4, Informative

A million dollars buys you a lot.

Barack Obama (D)
Top Contributors

University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

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Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you

Re:GS is a big donor to the right people by Grismar · 2011-03-19 07:54 · Score: 4, Insightful

Don't get me wrong, I'm not so naïve to believe US politics (or any Western country's politics for that matter) are free of corruption. But you're right there on the other end of the spectrum: making everyone supporting a political cause with money suspect.
If you think that's somehow helpful, power to you, but I don't see how it is. Of course you could be of the opinion that supporting a political cause with money is a bad thing for exactly that reason, but believing that would stop everyone from doing it would be no less naïve...
Re:GS is a big donor to the right people by rbayer · 2011-03-19 10:09 · Score: 2, Informative

If you read the link where these numbers came from (I know, that would be WAY uncool around here), you'll see that "The organizations themselves did not donate , rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families."
Do you really think the University of California as an institution gave $1.5 million to Obama? Of course not, but add up all the generally left-leaning faculty, staff, grad students, and alumni across all the campuses and that number sounds much more reasonable.
Re:GS is a big donor to the right people by nbauman · 2011-03-20 03:42 · Score: 2

making everyone supporting a political cause with money suspect.
I suspect that some people support political candidates as a quid pro quo for government favors in return. In some cases, like military contractors, it seems obvious. Their PAC contributes to the Democratic candidate, and to the Republican running against him. What's their motivation? Once in the while politicians go to jail when they get caught on tape admitting it.
But putting straightforward quid pro quo aside, the problem is with the system that requires politicians to raise hundreds of millions of dollars, from the very people they're supposed to regulate, before they can even run for office. Obama raised $1 billion, overwhelmingly from big business PACS and millionaires -- mostly from the same campaign contributors who fund the Republicans, who were hedging their bets.
If you want to run for president on policies that are popular with the voters, and you can't raise $1 billion for a campaign, as Obama did, then you can't get elected.

Of course you could be of the opinion that supporting a political cause with money is a bad thing for exactly that reason, but believing that would stop everyone from doing it would be no less naïve...
Yes, I believe that having elections in which candidates must raise hundreds of millions of dollars is a bad thing. I realize that under the Republican Supreme Court, we're unlikely to stop it.

Re:This is stupid by Solandri · 2011-03-19 08:06 · Score: 2

The system is broken, and its because most people are technical laggards and people are just too lazy to fix a broken system.

The system isn't broken. It's working as intended - following the golden rule. He who has the gold makes the rules.

Well, Obama did hire Goldman's top lobbyist by unassimilatible · 2011-03-19 08:15 · Score: 5, Interesting

As his Treasury Secretary's chief of staff. How's that for influence? And GE's CEO is on his economic team.

Question for you: If money doesn't buy influence, why do companies donate to candidates? And don't say because they are true believers - most donate to both sides.

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Re:This is stupid by hoggoth · 2011-03-19 08:30 · Score: 2

If you steal code that allows your company to make huge profits by executing trades a microsecond faster than your competition in a field with only a handful of real players, you certainly have taken something away from your company.

How that should ethically compare to other crimes and "business practices" that should be crimes is a different matter. But you cannot argue that Goldman hasn't lost anything.

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Your argument is stupid and invalid by Cyberax · 2011-03-19 09:12 · Score: 2

Your argument is invalid, and that's why - other prices are not rising, except for some commodities.

Look, oil has risen from $37 at the bottom of the financial crisis. Now it's back to $100. That's increase of 2.5 times! Inflation generally requires ALL prices to come up, and this hasn't happened so far - prices for non-energy-intensive goods and services are stable (within a few percents). There's no real inflation in the USA.

And please notice the part: "In the USA". Because there's also no inflation in the Eurozone! And the exchange rate of euro vs. dollar has not changed much since the start of the crisis (not by 2.5 times as it would be implied by oil prices).

What happens in reality is peak oil. There's a strong demand for energy from China, India and Brazil which have economies growing fast (China is back at 10%-a-year growth!) and there's just not enough oil.

"Stop the money printing, cut the government by an amount that would return it to pre-1913 levels, and you'll allow the economy to fix itself."

Yeah, fix itself in the sense "emasculate". Right into the Greatest Depression. Fiat money is one of the greatest inventions of the 20-th century.

PS: stop whining about 'inflation destroying savings'. You ain't seeing no inflation. Read about 1000% a year inflation after the USSR collapse - that'll teach you what the REAL inflation is.

Re:This is stupid by bunratty · 2011-03-19 09:22 · Score: 2

If I were able to make an exact duplicate of an object, I would be able to get an apple from your apple while allowing you to keep your apple. I suppose I could use the same trick on rare coins and make as many copies as I want without taking your rare coin. However, flooding the market with many copies of a rare coin would dilute the value of each individual coin, causing your coin to lose value even though I have not taken it from you. In the same way, information is valuable if not many people know the information. That's why trade secrets exist.

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The same old song. by westlake · 2011-03-19 09:40 · Score: 2

The punishment does not fit the crime. Period.
This should be a *civil* matter. Garnish his wages, make him pay for restitution and loss of revenues, but this should not be a criminal offense.

It always comes as a surprise to some folks when a white collar criminal - particularly one of their own class or profession - is caged.

Which is really the whole point of the business:

It teaches the lesson that no one is above the law. That no one is judgement proof.

True, which is why Goldman gave more to Obama by unassimilatible · 2011-03-19 09:59 · Score: 2

But hedged their bets by giving some to McCain, who ironically was leading in the polls until Lehman failed. Maybe these Goldman analysts are pretty damn smart after all. "Hey, we banks are a house of cards about to implode, so let's go with the guy who won't get blamed as 'Bush's third term.'" But just in case, we'll throw McCain some scraps as well.

Goldman Sachs: Recipients
2008 Cycle

Senate Obama, Barack (D-IL) $995,745
Senate Clinton, Hillary (D-NY) $401,950
Delegate Romney, Mitt (R) $235,275
Senate McCain, John (R-AZ) $234,695
House Himes, Jim (D-CT) $150,498
Senate Dodd, Chris (D-CT) $112,500 (co-architect of "Dodd-Frank" watered-down financial regulation bill)

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Re:wrong by Pinky's+Brain · 2011-03-19 11:04 · Score: 2

It led to a significantly more stable economy ... until Reagan fucked it up and trade imbalances and debt (the latter partially being created by the powers that be to make the former sustainable for a longer time) started going only one way. The last 30 years have been a stable drive, towards impending doom (for most of us, although obviously not for the neo-feudal overlords busy concentrating ownership in land/power/water).

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Former Goldman Programmer Sentenced To 97 Months

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