Ex-Goldman Programmer Guilty of Stealing Software Secrets

bloomberg.com/news/2010-12-1 … crets.html

So it’s OK for GS to commit fraud on a global scale, destroy lives in the process, that’s acceptable, but if a software engineer takes some software out of GS, he gets locked up.

Ex-Goldman programmer gets 8 years for code theft → reuters.com/article/2011/03/ … BK20110319

God feels that only certain people should be doing his Work.


Why does everyone here in the Pin check their brain at the thread door when it’s a topic about Goldman Sachs? This guy stole intellectual property. You cannot defend him. He needs to go to jail.

GS haven’t found the Holy Grail of black box trading that allows them to magically “manipulate markets”. Nobody has. Because it doesnt exist. The GS quant dept make money the same way as every other quant dept. They hire bucket loads of the smartest math people in the world and get them to do statistical analysis to predict future price movements. GS makes more money than others because they pay the most to the best minds in the world. These guys produce formulas and algorithms which are plugged into the automated trading systems. It was these formulas and algorithms and trading rules that this guy stole.

The allegation that the data can be used to manipulate markets can only mean that it could be used to predict what trades GS’s quant trading department would make - and then to manipulate the trading data to fool GS’s systems to placing those trades at incorrect times.

Goldman Sachs hires armies of tens of thousands of the smartest maths brains in the world - probably more than any other organisation in finance. It should be no surprise that they make obscene amounts of money. And I guess it should also be no surprise that a misinformed public will automatically jump to conclusions and label them as evil and corrupt purely because they are supremely profitable. Sure, some of their employees have been involved in dodgy deals, but no organisation is fully clean, especially one as large as them.

I’m not a GS tin-foil hat. They survived 2008 because they were very smart. A lot smarted than the other six IB’s. Because GS upper management bet against their own trading desks. And I agree the guy was a moron to try to walk out with the code. Its not the first time someone like him got whacked for doing something like this. He should have known that trying to walk out the door with his SLang/SecDB code was just asking for trouble.

But its not the HFT guys at GS that the informed complaints of market rigging are against. Its the ones who were given the job of market making post 2008. The evidence against them (and JPM) that there is serious front running is now overwhelming. That is why most serious players now either dark pool their trades or only use trusted by pass routes for trading.

Most of their profits the last few years has less to do with how many PhD quants they have or superstar traders but more to do with the enormous leverage they have in markets they trade with the billions of basically cost free money that have from the Fed Discount window. If the guys on the other side of the trading play only have access to a few hundred million in (some cost) liquidity and the GS traders have a bill or two (of no cost) on call guess who is going to win. This is not rockets science financial engineering in play. This is a good old traditional squeeze play straight out of the 1920’s.

GS is like Microsoft in the old days. They have a grossly inflated sense of how smart they are but when you actually look at the numbers most of their profits dont come from the fact that they are so smart but rather that they have market monopolies and they grossly abuse their monopoly positions.


If you’re in the mood for not defending people and just locking them up, then please update this thread with all your victories:
Where’s the perp walk?


Do you think this is how the justice system in the US is supposed to work? IP infringement gets 8 years - and anyone else? Anyone? No other perps in GS? Sure? Positive?

If we’re going to be zealous about law enforcement - then let’s start a little higher up the tree, please.

But WGU - that’s my point! There isn’t a long line of GS people going to jail because either
a) they are incredibly sophisticated and capable of keeping every potential whistleblower in check
b) it’s because the vast majority of their profits are made within the law.

There are very few examples of where they did something illegal, so why does everyone here automatically jump to a guilty judgement? Because they make billions? Sorry, but that’s not a valid reason.

You can argue (correctly) that they have received an appalling amount of generosity from their friends in the government - but this is not illegal. And I don’t see what unfounded rumours of front running has to do with this case? Front running needs a fresh supply of orders every day and nobody is alleging that he was stealing this info as well as the code.

What I don’t understand is why he would steal (or copy) this info on “his last day at work”? If ya know you are leaving/resigning, or even before (as a bit of insurance) anybody with a brain would have smuggled this info out weeks or months earlier. If they had just informed him he was being fired Security would have walked him to the door with a supervised 5 minute stop at his desk.

No way they would have left a techie, with the knowledge to do harm, stay at work with full network access - his passwords would have mysteriously failed to work before he got in that morning.

The reason why I (I won’t speak for anyone else) assume that Goldman Sachs (and others) are rigging the game is because the game is rigged.

Look at what people are saying about the stock exchange: It’s all HFT; There’s is no market; QE is all about market manipulation.
netcastdaily.com/broadcast/f … 0305-1.mp3

There is regulatory capture and crony capitalism:

When the rules of the game can be changed in mid-play - then nothing is illegal:

And even when it is completely illegal - nothing happens:

All the above don’t implicate GS in anyway - but if you lie down with dogs - and, in fact, claim to be the Alpha Dog, and yet somehow claim that you’re not flea-ridden - well…

The nearest to a lawsuit was an SEC case that got settled:
en.wikipedia.org/wiki/Goldman_Sa … April_2010
But even that looks to have been a political construct - to CYA all round.

The question with GS, and others, is not have they broken any laws - but why are they not being prosecuted?

And that question is not seeking GS heads - but actually seeking an examination of the wider ecosystem as to why it’s not healing itself.

Are you suggesting that they can somehow listen in to the trades sent between another trader and the exchange, and then be fast enough to resend this trade information back to that exchange before the original trade got there?!

How is this the fault of GS? Unless you think that the judge was bought off?

Your problem seems to be with the legal system, and not GS.

Its very simple to show I.P theft. I.P theft of this type has a strong case history of nasty sentences. The guy was very well paid so he could afford the best lawyers. The fact he is going to jail tells me he is an arrogant stupid little twat. As was the way he tried top walk off with the code. 37MB is many many hundred of thousand of lines of code and probably the whole build system as well. He was not just taking ‘his’ work with him he was probably trying to walk out with a large chunk of the core parts of GS’s software. This software allows GS to do global real time position updates while their competitors all seem to be stuck in a batch / end of day land for their global positions. That ability seems to be a large part of how GS survived intact the roller-coaster of Q3 2008.

As for the rest of the perps. Justice moves very slowly for those who have money and influence. Come back in ten years time and you will be pleasantly surprised just how many will have had their day in court. That’s how it was with the S&L debacle.

I’ll agree he was purely HFT / proprietary trading and nothing to do with the market marking operation I just brought it up as this operation is central to understanding how the big boys operate. The front running evidence is overwhelming. The law is very straight forward and has been since 1934. I lay the blame for letting it continue fully with the SEC. Everyone knows how the game is played. The gov sets the rules and the traders try to find ways to game it. Its always been that way. Its the role of the regulators to stomp the most egregious behavior not for the traders to act like boy scouts.

HFT just means very fast trading. Nothing mysterious. At what speed does a trade have to be before it can be considered to have become an evil “market-manipulating” trade? Is it when it is faster than everyone else? So do you think in the days of old floor trading that the trader who was quickest to think and shout out his trades was by default a “market manipulator” too? Or is there something evil about milliseconds?

I haven’t watched that video but if it is saying that big business has too much influence in politics then of course I agree. But how is this illegal?

The FASB allowed banks to lie and pretend that they own more assets than necessary. Shameful as this wass, it is still just a rule/guideline that can be changed by a regulatory body. It is not a legal issue. The law was not changed mid-play - only a regulator’s rule.

Please expand on this? Bond prices fell and Fannie Mae and Freddie Mac were bailed out. How is this “completely illegal”? What has this got to do with GS?

  • but if you lie down with dogs - and, in fact, claim to be the Alpha Dog, and yet somehow claim that you’re not flea-ridden - well…
    Again, thanks for proving my point - no evidence except they make loadsa money, therefore they must be guilty of something. Sorry, but that doesn’t stand up in a court of law.

That case involved GS pairing up two of their clients who wished to make a trade together. GS charged them for the transaction costs but did not charge them for advice - because both parties to the transaction declined to pay their fee. Both parties made changes to the terms of the deal. There are countless trades done every day, and most of the time the intermediary would probably have an opinion as to which side was getting the better deal. But they aren’t asked for their advice. GS was simply paid to find the counterparties to the trade. This was yet another shameful example of a regulator getting involved because of political pressure. If you were the head of the most fair company in the world but the regulator is under orders from politicians to draw blood then you would be mad not to settle and give him a kill.

You have yet to give an example of where GS have broken a law but have not been prosecuted.

I would agree that the wider system needs an overhaul - especially removing business from politics. But to use your own phraseology, you cannot change the rules of the game mid-play and decide that companies are behaving illegally just because it seems wrong to you.

zerohedge.com/article/hft-no … ry-capture
webofdebt.com/articles/compu … unning.php
seekingalpha.com/article/151173- … ading-scam
nytimes.com/2009/07/24/busin … f=business

It’s not milliseconds that concern me - here’s Joe Saluzzi and Chris Martenson discussing the aspects to HFT that change the game:
media.chrismartenson.com/audio/j … -final.mp3

Nope - he’s saying if you tell someone in Indonesia how the law gets enforced in the US now, they will relate to it immediately, that the road the US is going down is the well-worn route of crony capitalism. It’s not business influencing politics - it’s business owning politics.

Ahhhhh - but the regulatory body was told to change it. They didn’t just decide off their own back - the legislators told them to - or lose their regulatory power. And why did the legislator get involved? See previous point.

Whoops!!! Meant to link to the Repo 105 debacle - not sure how I got the other thread:
Its here…the Chapter 11 Report on Lehman…

The point was meant to be if Dick Fuld - the archetypal baddie - was caught cold and still didn’t go down - then nobody was going down.

You’re asking the impossible though - when the legislators and regulators will change the law and rules retrospectively - then nothing can be illegal.

Watch what happens with the Fraudclosure debacle. Everyone knows they’ll have to do something outrageous to keep the banks whole - and they will.

That makes no sense I’m afraid. The FCIC had them all bang to rights:

If the politicians wanted to throw bodies in front of the bus, they had it there - but they didn’t. Just ask Angelo - and his friends! The GS/SEC bullshit was a Kabuki play

Again - I can’t give you an example if they own the system and change the rules as and when they need to - you can never be prosecuted if you can retrospectively change the rules to make it all legal and keep you whole.

But the rules are being changed mid-play!!! You agreed earlier the FASB did! Now just follow the trail…

WGU I think we are just arguing about semantics. You say that a regulator decreasing the capital requirements for banks implies “you can never be prosecuted if you can retrospectively change the rules to make it all legal and keep you whole”. But I think it is an important distinction - the rules were changed but not the law. It is a huge accusation to make that the law is being changed retrospectively. You are basically saying that these people are above the law - but the reality is that they are simply stretching the law to its fullest by bribing the politicians. It may sound like the same thing, but the rule of law is still being upheld.

People and companies are innocent until proven guilty. GS is no exception. But I’m guessing that pretty much everyone here has already made up their minds that GS are a fraudulent company - purely because they make billions. Everyone here “knows” that they are corrupt, but nobody thinks hard evidence is necessary. Banana republic anyone?!


Again I won’t speak for everybody - I’ll just give my opinion.

Ireland has effectively legalised corruption - indymedia.ie/article/91376 .

I really expected the US to be different.

It turns out that they’re not.

The form of capitalism that we had in Ireland was disastrous. Anglo were the poster boys - and not one of the cunts may ever spend a night in jail - but they certainly perfected the art of “stretching the law to its fullest”.

GS are the poster boys for the new form of US capitalism. Whatdya reckon? Think the GS boys being called the new Anglo is a compliment?

With respect to convictions with hard evidence - well it’s all there in black and white for Dick Fuld and Angelo Mozilo - and yet…nothing. So what hope the TBTJ Goldman?

As for banana republic-style democracy - I think for any Irish person it’s more a case of “remove the beam out of your own eye, and then you can see clearly to remove the speck out of your brother’s eye”.

Ah, the good old “flash order” chestnut makes an appearance. I’m guessing that 99% of people read that quote and didn’t quite understand it, but somehow jumped to the conclusion that yes there must be something bad going on.

Here’s a crucial quote in that NYT article:

So, when you actually get down to the real issue, it is simply about a game of poker. The same game of poker that is played out in every business transaction in every store across the world - whether it is a FTB versus a Developer, or a customer at a car-boot sale. The buyer wants to buy a lot at a price higher than is currently on offer, but he doesn’t want to tell the seller. In this case, the buyer decided that he would send a flash order advertising that he was a buyer. This was a gamble that apparently didn’t pay off. They would have been better off if they tried to buy it in a different manner. They tried to be sneaky but they were caught out by the middlemen and the sellers.

That game of poker has been going on for centuries, and will continue to go on as long as humans want to maximise their wealth. Flash orders create a few new nuances in the game, but there is nothing evil about them.

It is also worth noting that the buyers in the example above actually chose to input flash orders because they felt it would benefit them.

But let me guess, you still think they are scary:)

You make a lot of assumptions. You asked a question, I posted some articles I read on the topic. That’s all.