Comments on: Was Goldman’s trading software stolen?

By: James Burkhardt

James Burkhardt — Thu, 09 Jul 2009 17:51:24 +0000

If loss of this software is feared for its potential to manipulate the stock market, how has Goldman Sachs been using it. Read “The Losing Game: Why You Can’t Beat Wall Street by T.E. Scott and Stephen Edds.

By: Sergey (!= Aleynikov)

Sergey (!= Aleynikov) — Wed, 08 Jul 2009 13:13:43 +0000

I just wondering why this topic become magnet for so many self promoting posts with links to garbage outside Reuters.

Between us financial professionals:)

1. Stealing and selling trading system to foreigner company doesn’t make sense. As I post before, trading systems are very specialized to particular bank. Even quantitative part that does decision making cannot be simply carried away. Adaptation of such piece requires join effort of several highly skilled quants and quantitative programmers. They cannot tune up system without detail knowledge of math behind. But with such knowledge they can write it from scratch.

2. GS former employees keep many poverful position in gov.
GS is presumed to be the best investment bank. GS on resume gives huge competitive advantage. We all like hire people with best resumes.

3. GS/Pulson kill Lehman.
Lehman had leverage 30-to-1 with small cash reserves. GS had between 18 and 21 to 1. MS had 22-25 to 1.
Couple days before Lehman was gone, on a trading floor I heard ‘DB stopped taking Lehman as collateral. ALL trades with Lehman must be settled only in-cash’. That will kill any investment bank in couple days.

4. GS orchestrated gov bail out.
AFAIK GS and MS were reluctant to convert to bank holding company. Because bank holding companies are subject to very different regulations. Including much lover leverage ratio.

By: Anubis

Anubis — Wed, 08 Jul 2009 01:58:21 +0000

What goes around. comes around. Even Goldman has to reap the harvest of what they sew. I have no sympathy. Everyone should read Matt Taibbi’s investigative report in the 6-23-09 issue of Rolling Stone.

By: Sergey (!= Aleynikov)

Sergey (!= Aleynikov) — Mon, 06 Jul 2009 21:23:31 +0000

I do high frequency trading :).
We all learn while we move from one employer to another. This is called experience. Stealing algorithmic trading software makes no sense to me. Algorithmic trading systems are very complex, closely tight to bunch of proprietary hardware and software infrastructure. They cannot be copied around as pirate copy of MS Office. Once in awhile, people bring pieces of code from previous employers for personal advantage. They look great when complete huge project in no-time. Big firms like ‘Big Chicago Firm’ cannot afford damage associated with usage of stolen software. They often poke employees from competitors to benefit from ideas but not from stolen software.
If guy had stolen code he must go to jail. But I afraid that GS uses this case as excuse to put ground work to prevent employees to go to another firms.

By: JohnMD

JohnMD — Mon, 06 Jul 2009 18:23:22 +0000

Too bad no one analyzed the Goldman Sachs programs. These may be the programs that the firm uses to manipulate markets with money provided by the Federal Reserve Slush Fund.

By: Harvey

Harvey — Mon, 06 Jul 2009 17:24:09 +0000

Again, as Dale Jeffers posted above, every American
needs to read the Rolling Stone’s article on Goldman
Sachs….you will never view GS the same afterward,
and if you have any sense, will start writing your
representatives about criminal investigations, if you
can find one that has not already been corrupted by
GS contributions. This is major, and I think many of
the comments above are hitting on the crux of the matter…
this case is a small tip of the iceberg, and this Russian guy may be the sacrificial lamb. Go here http://www.rollingstone.com/politics/sto ry/28816321/the_great_american_bubble_ma chine/print

By: anonymous

anonymous — Mon, 06 Jul 2009 17:08:33 +0000

I don’t understand why would his being Russian immirgants has any importance to the events, when he is already citizen
Also most banks are very advance in updated their computer systems, almost every other week, there will be changes to the existing systems
so what are the importance of some very old codes?
Anyway I must be sending my resume to the wrong places all these years because I make so little in comparsion to him

By: John Smith

John Smith — Mon, 06 Jul 2009 16:54:26 +0000

While it’s no question that if he crossed the line, he should go to jail, I must say that there is always other side to a story like this.

I did some very good work for one of my previous employer. Even though it was done as a pet project in my spare time, I did it while working for this company, on their equipment, and so when I lost my job, it became company property. I never got any returns out of it. The company is making money from my creativity, my extra efforts and my hardwork.

Yes, there is a law that says if it is done on company equipment it belongs to the company. But equipment is not the only thing that goes into making something creative, something intellectual.

So if he did all this work, and if suddenly Goldman wants to hand him a pink slip, then I do feel sympathy for him. I have first hand experienced that law is grossly unfair in cases like this. While I would not break the law myself, I just think he is not as evil as it sounds here.

It’s funny how the author of the article immediately highlighted the fact that he is an immigrant, as if that automatically says something about him committing a crime. The beginning of the article stinks as biased.

By: Elie

Elie — Mon, 06 Jul 2009 16:11:07 +0000

I see that you guys have made up your minds about the case!!!
Hopefully the real judge of the case will not do the same!!!

By: OldDad

OldDad — Mon, 06 Jul 2009 16:10:27 +0000

What Goldman does is not illegal; however, it does manipulate the market: same as insider trading. In that respect, it should be outlawed. So, has thief number one robbed thief number two? The real victims are the public investors who get swamped by the Goldman (and others) massive buys and sells which are not based on public mutualy perceived stock values, but only on a computer code’s calculated price.