Former Goldman Sachs Programmer Arrested and Charged Again For Code Theft

hypnosec writes with news that Sergey Aleynikov, once a programmer for Goldman Sachs, has been arrested and charged again for stealing code from his employer in 2009. Aleynikov was originally charged for the crime in 2009. He was convicted in 2010 and sentenced to 97 months in prison, but an appeals court overturned the verdict, saying the corporate espionage laws were misapplied. Manhattan District Attorney Cryus Vance said, "This code is so highly confidential that it is known in the industry as the firm's 'secret sauce.' Employees who exploit their access to sensitive information should expect to face criminal prosecution in New York State in appropriate cases." The Fifth Amendment's "double jeopardy" clause is unlikely to stop this case because it's within a different jurisdiction — the earlier trial was in federal court, and this one is in New York State court.

Comments

Out of his mind

[Anonymous Coward]

So even if he is the original author of the software, (he carries the details and inspiration in his head), and the software came out of his mind, he is still a criminal for telling/selling his idea to someone else.

Re:Out of his mind

[Talderas]

How is this not blackmail?

Re:Out of his mind

[dmorris68]

So even if he is the original author of the software, (he carries the details and inspiration in his head), and the software came out of his mind, he is still a criminal for telling/selling his idea to someone else.

In some circumstances, absolutely.

Most software developers sign agreements that stipulate that any software or other intellectual property created for the company and on company time belongs to the company, not the developer. Some even go as far as to take ownership of anything you develop *even on your own time.* Many employers will also make you sign a non-compete agreement that basically says when you leave the company, you will not engage in competitive behavior against the company, which could also be construed as developing a similar algorithm for a competitor, at least within a specified period of time.

In my career as a developer I've signed a number of these types of agreements, and just for "ordinary" corporate jobs. Given the highly competitive and secretive financial industry and the money at stake, it wouldn't surprise me if their agreements are far more complex and specific. Especially due to the very high degree of specialization required in financial services programming, particularly in trading software where milliseconds can mean a difference between millions of dollars, they tend to be pretty protective of their IP (and thus why those programmers make hundreds of thousands a year in salary, way beyond your garden-variety corporate developers).

Now of course a developer with a specialized skillset and experience, barring a non-compete agreement or a patent that would specifically prohibit it, could certainly go to work for another company and re-create a similar algorithm from scratch, and it would be very difficult to litigate against as long as it's based upon memory/experience and not by taking the actual source code with him. It would largely hinge on whether the concept was generic or common across the industry, or whether it was a unique and highly-specific concept that had never existed outside the original company, and then suddenly shows up in a pretty obvious way at a competitor which just happened to recently hire your former employee.

Re:Out of his mind

[Nitewing98]

"So even if he is the original author of the software, (he carries the details and inspiration in his head), and the software came out of his mind, he is still a criminal for telling/selling his idea to someone else."

Yep. As long as he was being paid by GS to write that code, it belongs to them. I know that most programmers don't like this idea, but that's the way IP works in this world. I think it sucks too. But from a business perspective, how else do they "get an edge" on their competitors, if they have the same software?

double this

[alphatel]

Feds walk away from prosecuting Goldman, SEC misses Madoff, but this guy needs to be prosecuted - twice!

Re: a lesson

[denis-The-menace]

Actually be the government, that's the best way to steal.

Proof: US Senators are allowed to commit insider trading.

Re:I'll Take....

[Dunbal]

Yep, there are so many laws nowadays even the lawyers aren't sure any more. So they just wing it. If the man wants you in jail, he has the time and resources to keep this shit up until you are either in jail or put a bullet in your own head. Welcome to the real world. And people look at me funny when I say I am anti-government. And please don't give me this republican/democrat/liberal/conservative bullshit. All that means is you're sitting on a different turd, but you're still in the septic tank.

Re:This come to mind...

[sycodon]

What he should have done was follow the lead of Goldman Sacks executives. Then he wouldn't be prosecuted for anything.

Re:Sounds Like It To Me

[Hatta]

Double Jeopardy does not apply because of a different jurisdiction.

Funny, I don't see that exception in the Constitution anywhere. This is what we traditionally call an "end run around the Constitution". Legalistic bullshit used to cover up a blatant violation of the highest law of the land. It's indefensible and you should be ashamed of your self for trying.

Re:Sounds Like It To Me

[maroberts]

Double jeopardy applies only to criminal cases, and nothing is said in the constitution about jurisdiction - he's still been tried on the same charge for the same actions. I'm fairly certain that any conviction would be overturned

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Nothing about jurisdiction in there, is there? Even the fact that the court overturned the trial verdict does not mean the trial never occurred.
Sergey Aleynikov may have performed dubious actions and got off due to the techicalities of the law, but that should be sufficient.

We are borked as a nation

[tekrat]

Wow, I think I have finally witnessed the last straw.

Interestingly, I attended last night, a debate at a group known as "Drinking Liberally" where the president of the local group stated that he could not vote for Obama, because the administration has a kill-list, has not been transparent, has not closed Guantanamo, and has continued many of the Bush Policies that we had hoped to change. The Woman debating him stated that NOT voting for Obama was voting for Romney who will be worse. That didn't change the mind of the group leader who said he would be voting Green Party.

Now, I am wondering myself about this in the context of this blatant attempt to subvert the law so that the 1% can get what they want, and the lawyers and politicians are clearly on the side of the 1% and not looking out for the rights of the people.

We are truly borked as nation. There's no going back from this kind of corruption. If this even goes to COURT, it's a complete breakdown of our "justice" system (and I use that term loosely.

Tell me Mr. Prosecutor; how many arrests have you made from the financial boondoggle of 2008? How many arrests have you made from the Robo-Foreclosure scandal? But you're supporting the whims of the very crooks who have robbed our nation? Why not just start working for the Mafia? I hear they pay good as well.

Re:I'll Take....

[whoever57]

That would be true if it was the federal government that wanted to re-try him. However, in this case, the reason double jeopardy doesn't apply is because of the dual sovereignty doctrine

I doubt that the framers of the constitition intended the double jeopardy clause to work this way.

Re:This come to mind...

[pla]

Ah, yep. You have it right. Mixed up my conflicts of interest.

Damn, gotta go wipe that egg off my face now... :)

Re:US Not Seeking Goldman Charges

[cpu6502]

This article is high on chest-beating and low on actual facts: "When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried." --- Really? Sets people aflame with gasoline?!?!? Was this the WSJ with Alex Jones filling-in as a reporter? (Here's a thought: Tell us what Goldman ACTUALLY did wrong instead of using hyperbole that makes them sound like the darkest, meanest SS officer in the camps.)