Wednesday, March 14, 2012

The Complicated World of Corporate Espionage
Corporate espionage used to be rather straightforward – as the typical Coke-Pepsi textbook example illustrates, in which each tries to steal the other’s recipe for sugared water. It is a crime when someone steals company data/trade secrets and passes it to a business rival. 

Well, yes -- but not quite, in the case a series of court decisions in the United States that complicate the issue considerably. One involves a former Goldman Sachs computer programmer, Sergey Aleynikov, a Russian who immigrated to the United States in 1991 and who was arrested by FBI agents on July 3, 2009, at Newark International Airport. 

Aleynikov was subsequently jailed in December 2010 for stealing code from Goldman Sachs’ high-frequency trading platform, a lucrative new segment of Wall Street that uses complex computer algorithms to convert minute price discrepancies into quick profits through rapid fire trades. He had served one year of his eight-year sentence when he was freed by the Court of Appeals for the Second Circuit in New York in mid-February.

The court offered no explanation for overturning his conviction other than stating an opinion would be issued “in due course,” according to The New York Times.

Aleynikov allegedly stole the source code used in driving those high frequency trades at his employer prior to joining a new competitor, with plans to set up a similar trading platform – he allegedly uploaded the code onto a computer server in Germany, encrypted and downloaded it into his home computer, laptop and memory stick and took the data with him when he joined the new company.


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