Tags: Goldman Sachs | Sergey Aleynikov | Flash Boys | HFT

'Flash Boys' Programmer in Goldman Case Prevails Second Time

Monday, 06 July 2015 12:03 PM

A former Goldman Sachs Group Inc. programmer had a second conviction thrown out as another court ruled that taking the firm’s high frequency trading code wasn’t a crime.

Sergey Aleynikov, whose travails helped inspire Michael Lewis’s “Flash Boys,” was tried by New York prosecutors who took up the case after a federal conviction unraveled. His defense both times was that his actions were a disagreement between him and the bank, better suited for civil litigation.

A state judge Monday agreed, lining up behind a federal appeals court that found in 2012 existing laws are a bad fit.

Aleynikov still faces a potential appeal by Manhattan District Attorney Cyrus R. Vance Jr., though the prosecutor has said he won’t seek more prison time than the year Aleynikov spent locked up in the federal case.

Both prosecutions raised questions about how intellectual property disputes between companies and employees should be handled, especially on Wall Street. Aleynikov’s trip through two criminal justice systems has been closely watched by financial firms as they seek to hire programmers to implement trading strategies.

In the state case, the judge took the uncommon step of reserving his right to set aside the jury’s guilty verdict, delivered in May. Defense attorneys had asked him to dismiss it, arguing there was no evidence Aleynikov made a “tangible” reproduction of the code or benefited from having it, both requirements under New York law.

Justice Daniel Conviser agreed, adding that prosecutors also didn’t prove Aleynikov intended to steal “secret scientific material,” another prerequisite for conviction.

“The issues in this case have never been easy,” Conviser wrote. “We update our criminal law in this country, however, through the legislative process. Defendants cannot be convicted of crimes because we believe as a matter of policy that their conduct warrants prosecution.”

Defense lawyer Kevin Marino Monday called on Vance to drop the case.

“That Cyrus Vance would pursue this prosecution after Mr. Aleynikov spent a year in federal prison for crimes he did not commit is appalling,” Marino said.

Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to immediately comment.

© Copyright 2018 Bloomberg News. All rights reserved.

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A former Goldman Sachs programmer had a second conviction thrown out as another court ruled that taking the firm's high frequency trading code wasn't a crime.
Goldman Sachs, Sergey Aleynikov, Flash Boys, HFT
Monday, 06 July 2015 12:03 PM
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