Sergey and Misha

July 7, 2009

The name of the Chicago firm that hired alleged Goldman code-cracker Sergey Aleynikov is out and it’s a name you’ve probably never heard of before. That’s because Teza Technologies LLC is a new firm–formed in May–by former Citadel Investment Group trader Misha Malyshev.

Malyshev, who had been a top high-frequency trader at Citadel, left the giant hedge fund in February because he felt he was not being sufficiently compensated, says a source familiar with the situation. Malyshev’s group was one of the more profitable last year for Ken Griffin’s operation, which¬†overall had one of its worst years ever in 2008

And here’s the thing: I’m told Malyshev signed a nine month non-compete agreement with Citadel when he left.

Bloomberg first reported that Teza hired Aleynikov and got an email statement from the start-up, in which the firm said it “was not aware of the alleged misconduct.”

In the email statement, Teza also said it has suspended Aleynikov without pay and didn’t learn of his July 3 arrest until July 5. That, of course, is the day that we at Reuters broke the news that Aleynikov was arrested by federal authorities and charged with stealing the source code for Goldman’s rapid-fire stock and commodities trading platform.

Right now, Teza is a small operation at best. There’s no website for the firm and it doesn’t appear to have a listed phone number. Illinois incorporation records reveal the company was formed on May 5. One of the mailing addresses appears to be the home address for one of the principals, Matthew Hinerfeld, who is an ex-Citadel guy too.

Hinerfeld worked in the counsel’s office at Citadel. So is another founder, Jace Kohlmeier, who had the same non-compete agreement with Citadel as Malyshev.

In addition, Malyshev and his partners also have formed a company called Teza Group.

Right now there’s no indication that Malyshev and his partners had any knowledge of what Aleynikov was doing. But we’ll stay on the case.

Update: Finally got a copy of the Teza statement on Sergey. Here’s a particularly relevant snippet:

In connection with his hiring, Mr. Aleynikov was subjected to and passed a standard pre-employment background check and represented and agreed that he was not and would not be in violaton of any obligations to third parties, including that he had not and would not violate anyone’s intellectual property rights.


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