Ex-Goldman Sachs Programmer Seeks Dismissal of N.Y. Charges
January 18, 2013
A former Goldman Sachs Group Inc. programmer who successfully challenged a federal conviction for stealing internal code from the bank asked a judge to dismiss state charges filed against him for the same allegations.
Sergey Aleynikov was charged in August by the Manhattan District Attorney’s Office and indicted the following month on two counts of unlawful use of scientific material and one count of unlawful duplication of computer-related material. He has pleaded not guilty.
At a hearing in New York State Supreme Court in Manhattan today, his attorney, Kevin Marino, asked Justice Ronald Zweibel to dismiss the charges, arguing that Aleynikov had the right to copy the code and that the charges are barred by the state’s double-jeopardy statute as well as the Fifth Amendment of the U.S. Constitution.
“The reality is Sergey Aleynikov has suffered enough,” Marino said in court. “He has been punished enough.”
Aleynikov, a naturalized U.S. citizen born in Russia, was freed from federal prison in New Jersey in February after a U.S. appeals court reversed his December 2010 conviction for stealing the bank’s trading code, saying that the two laws that prosecutors used to charge Aleynikov -- the National Stolen Property Act and the Economic Espionage Act -- didn’t apply to his case.
Federal prosecutors claimed that, on his last day of work at New York-based Goldman Sachs in June 2009, Aleynikov uploaded hundreds of thousands of lines of source code from the firm’s high-frequency trading system.
Aleynikov, a vice president in the bank’s Global Equities Division until June 30, 2009, was part of a team responsible for developing and improving source code related to high-frequency trading.
New York prosecutors have said that while the federal appellate judges said Aleynikov’s conduct didn’t constitute a federal crime, they suggested it could be a violation of state law. The prosecutors also said Marino asserted in court documents that theft of trade secrets is a “quintessential state-law crime.”
President Barack Obama signed a measure on Dec. 28 broadening the scope of the Economic Espionage Act to include services intended for use in commerce beyond state lines, including computer source codes.
The 1996 law had applied only to products made specifically for use in interstate or foreign commerce, such as manufactured goods, and was broadened to apply to cases such as Aleynikov’s.
Aleynikov has filed a lawsuit against Goldman Sachs in federal court in New Jersey seeking payment of more than $2.4 million in legal fees, saying he’s entitled to indemnification because he was employed as an officer of the company.
“In addition to serving a year in prison for those crimes -- with which he should never have been charged -- Aleynikov suffered the loss of his job, his home, his reputation, his opportunity for meaningful employment in his chosen field, his marriage and his life savings as a result of his federal prosecution for allegedly misappropriating Goldman’s computer source code,” Marino wrote in his dismissal motion.