July 6, 2009 / 6:55 PM / 10 years ago

Bail set at $750,000 for ex-Goldman programmer

NEW YORK (Reuters) - A former Goldman Sachs Group computer programmer accused of stealing secret trading codes from the investment bank was being held in federal custody on Monday, pending the posting of $750,000 (462,000 pounds) bail.

Sergey Aleynikov, 39, was ordered by U.S. Magistrate Kevin Nathaniel Fox in Manhattan on Saturday to post a $750,000 personal recognizance bond to be secured by three financially responsible people, according to court documents.

The bond also was to include $75,000 in cash, and Aleynikov was ordered to surrender his passport and not to access the computer data at issue in the case. A preliminary hearing in his case was scheduled for August 3.

Aleynikov, a Russian immigrant living in New Jersey, was arrested on Friday night by FBI agents as he got off a flight at Newark Liberty International Airport, according to court documents.

His lawyer, Sabrina Shroff, said Monday afternoon that she hoped Aleynikov would be released shortly. She said the bail conditions could not be met immediately because he was arrested over a holiday weekend when most court offices were closed.

“I am hoping he will be out soon,” she said.

Aleynikov is accused of “theft of trade secrets” related to computer codes used for sophisticated automated stock and commodities trading at an unspecified, New York-based financial institution, according to the court affidavit filed by FBI special agent Michael McSwain.

Sources familiar with the situation have told Reuters columnist Matthew Goldstein that the financial institution is Goldman Sachs.

Goldman has not seen its business or clients harmed by the purported computer breach, a source familiar with the situation said.

A Goldman representative declined to comment.

The case could shed light on the intricate trading systems developed by the financial firm, and also raises questions about the security of Wall Street’s proprietary trading operations.

Authorities contend that Aleynikov, who had a $400,000-a-year job at one of the financial institution’s New York offices, improperly copied proprietary computer code and then uploaded it to a computer server in Germany.

He told authorities who arrested him that he had only intended to collect “open source” files on which he had worked but “later realized that he had obtained more files than he intended,” the FBI agent said in the affidavit.

In the court papers, the FBI said Aleynikov worked at an unspecified financial institution as a programmer from May 2007 until June 5, when he left to work for a new company focussed on high-volume automated trading.

Aleynikov’s wife, Elina, told Reuters on Sunday that her husband is innocent.

Speaking in a phone interview from the couple’s New Jersey home, she said her husband worked hard for Goldman and has been a good citizen who has lived in the United States for 19 years.

Aleynikov was being held at the Metropolitan Detention Centre in Brooklyn, according to the federal Bureau of Prisons website and an officer at the jail.

(Additional reporting by Elinor Comlay)

Reporting by Martha Graybow; Editing by Gerald E. McCormick and Richard Chang

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