7/31/2019 DA press release on Aleynikov charges

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DISTRICT ATTORNEYNEW YORK COUNTY

FOR IMMEDIATE RELEASE CONTACT: Erin DugganAugust 9, 2012 212-335-9400

FORMER GOLDMAN SACHS PROGRAMMER CHARGED WITH ILLEGALLY

TAKING PROPRIETARY COMPUTER CODE

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the arrest andarraignment of SERGEY ALEYNIKOV, 42, on a felony complaint charging him withaccessing and duplicating a complex proprietary and highly confidential computer sourcecode owned by Goldman Sachs, a New York-based financial institution. ALEYNIKOV, aformer computer programmer for Goldman Sachs, was charged in New York CountyCriminal Court with Unlawful Use of Secret Scientific Material and Unlawful Duplication ofComputer Related Material.1

This code is so highly confidential that it is known in the industry as the firms secretsauce, said District Attorney Vance. Employees who exploit their access to sensitive

information should expect to face criminal prosecution in New York State in appropriatecases.

According to the complaint and statements made on the record in court, ALEYNIKOV wasemployed by Goldman Sachs as a computer programmer from 2007 until 2009. His jobresponsibilities included developing and maintaining computer programs used to operate thebanks high-frequency trading system, which allowed Goldman Sachs traders to make a largevolume of trades in securities, commodities, and options based on trading decisions executedin fractions of a second. Trades are executed on the basis of algorithms that incorporatedata from rapid market developments and past trades. Goldman Sachs programmerscreated its high-frequency trading system to maintain a competitive advantage.

In April 2009, ALEYNIKOV gave notice of his intent to quit his job at Goldman Sachs.The defendant had accepted a job offer from Teza, a trading firm in Chicago, where he wasto be responsible for developing a high-frequency trading system to compete with GoldmanSachs.

1The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless

and until proven guilty.

CYRUSR.VANCE,JR.DISTRICTATTORNEY

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According to the complaint, on June 5, 2009, ALEYNIKOVs last day of workat GoldmanSachs, he copied and transferred hundreds of thousands of lines of source code forGoldman Sachs high-frequency trading system to a foreign server. This source codeincluded trading algorithms used to determine the value of stock options.

Senior Investigative Counsel Joanne Y. Li is prosecuting the case under the supervision ofAssistant District Attorney David Szuchman, Chief of the Cybercrime and Identity TheftBureau. Supervising Rackets Investigator Robert Muldoon, Senior Rackets InvestigatorJason Malone, Senior Cybercrime Analyst Jeremy Apple, and Cybercrime Analyst Bret Rubinalso assisted in the investigation.

District Attorney Vance thanked Supervisory Special Agent Michael McSwain of the FBIsNew York Field Office.

District Attorney Vance also thanked Goldman Sachs for its assistance and cooperation inthe investigation.

Defendant information:

SERGEY ALEYNIKOV, D.O.B. 2/6/1970West Orange, NJ

Charges:

Unlawful Use of Secret Scientific Material, a class E felony, 1 count

Duplication of Computer Related Material, a class E felony, 1 count

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New York County District Attorney |duggane@dany.nyc.gov| 212-335-9400

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