Wednesday, October 27, 2010, 10/27/2010 09:52:00 AM

Goldman Sachs Wants a Sealed, Closed Courtroom For Trade Secrets Theft Criminal Trial Against Former Employee

By Todd

The Wall Street Journal and Bloomberg are reporting that federal prosecutors in Manhattan this week asked a federal district judge to seal the courtroom at the forthcoming trial of a former Goldman computer programmer accused of stealing the firm's computer code. The move was a formal request to empty the courtroom of the general public when details of Goldman's trade secrets are being discussed. The trial is set to start to late November.
Prosecutors also asked that any documents related to Goldman's trading strategies remain under seal.
Such requests are common when proprietary corporate information could be exposed in a trial.

Lawyers for Mr. Aleynikov (that's Sergey Aleynikov in the picture), whom the indictment alleges uploaded Goldman code to a server in Germany and then downloaded it to his home computers, are expected to contend that the code he took only represented a fraction of the broader strategy and couldn't be used to hurt Goldman's business, court documents suggest.

Court documents filed by the government in July 2009, soon after Mr. Aleynikov's arrest, state that Goldman's strategies involve "sophisticated, high-speed and high-volume trades on various stock and commodities markets."

Prosecutors allege that Mr. Aleynikov transferred a substantial portion of that code to a computer server in Germany. He then downloaded the code to his personal laptop, which he allegedly brought to Chicago, where he had a meeting a firm that had hired him, start-up trading shop Teza Technologies LLC.
Teza became embroiled in its own legal battle following Mr. Aleynikov's arrest. Founder Mikhail "Misha" Malyshev and Teza employees were sued by their former employer, Chicago hedge fund Citadel LLC, for violating agreements not to work for a competitive firm. In mid-October 2009, a Chicago court granted sanctions against Teza.


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