Ex-Goldman threatens firm’s position

The arrest of a former Goldman employee Sergey Aleynikov made big news after the Russian allegedly stole Goldman Sachs computer code and transferred it to a computer server in Germany.  The disseminatin of this threatens to unveil the system being used by the bank holding company, therefore increasing its competition (albeit in an illegal manner) and losing the firm millions of dollars.

A statement made by Assistant US Attorney Joseph Facciponti said, via Bloomberg:

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.  The copy in Germany is still out there, and we at this time do not know who else has access to it.”

Also from the report:

The proprietary code lets the firm do “sophisticated, high- speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

The defense attorney dismissed the claim as ‘preposterous’.

Read more HERE.

This is a very interestng, but rather serious issue.

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