Defense Rests in Trial of Ex-Trader for Goldman Sachs

By ANNA GLEKSMAN

The defense rested its case Tuesday in the trial of a former Goldman Sachs programmer accused of stealing source code from the financial firm after the defendant’s subsequent employer testified that he had no knowledge of the existence of the code, which he asserted would have been of little use anyhow.

“Banks do not have good source code for high-frequency trading,” said Mosha Malyshev, founder of the firm Teza Technology, which the defendant, Sergey Aleynikov joined after leaving Goldman Sachs.

Malyshev, whose company specializes in large scale trading in short time spans based on algorithms and math equations, admitted paying Aleynikov $1.2 million but denied it was to compensate for stolen code, asserting that his trading was very fast paced whereas banks used “ large monolithic systems” which do not allow for swift changes.

Malyshev testified in Manhattan Supreme Court that he would have fired Aleynikov immediately if he knew he was using code from Goldman Sachs and would not even have taken their code for free.

Teza senior manager Peter Friedman also testified that he recruited the defendant Aleynikov who was descrtibed by colleagues as a top high frequency trader.

Aleynikov’s defense attorney Kevin Marino repeatedly has asked the judge to throw out all state charges claiming that although Aleynikov downloaded source code from Goldman Sachs before leaving his position this was in no way a breach of the bank’s confidentiality agreement or state laws.

The case began six years ago when Aleynikov was arrested under a federal indictment and found guilty. However, his conviction was overturned on a legal technicality, allowing him to be charged again in state court under a different legal theory, thereby avoiding double jeopardy.

 

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