Breakfast Links: Goldman trading scandal edition
Kudos to my colleague Matt Goldstein, who broke a big story on an emerging scandal at Goldman Sachs while the rest of us were enjoying a three day weekend. Forthwith, a digest of primary docs and blogosphere discussion since Matt broke the story.
A Goldman Trading Scandal (Reuters) This is Matt’s story. In a nutshell, federal authorities allege that former Goldman employee Sergey Aleynikov stole software he wrote that drives the company’s proprietary trading engines, the black box as it were. Aleynikov got a better gig in Chicago, announced his resignation, and, in his last week at Goldman, decided to take the black box with him. It all seems pretty foolish. Of course Goldman had him sign a standard non-disclosure agreement when he was hired, which means any software he wrote while at Goldman was Goldman’s property.
Aleynikov Complaint (Reuters) Here’s a pdf of the FBI affidavit that spells out the charges against Aleynikov. It’s clear Goldman knew about his allegedly illegal downloads a couple weeks before they moved to arrest him. At the start of a holiday weekend, when it is particularly hard to make bail and you’re likely to spend the whole weekend in the slammer.
Aleynikov’s LinkedIn profile (LinkedIn) Details about the alleged perp.
The plot thickens….
NYSE Program Trading update, 6-22 (NYSE) For months Goldman has been atop the list of program trading at the NYSE. Then suddenly the week of 6-22, Goldman disappears from the list. They didn’t just fall to fifth or sixth place. They disappeared. Is that because their trading programs were compromised by Aleynikov? Inquiring minds want to know.
Is a Case of Quant Trading Sabotage about to Destroy Goldman Sachs? (Zero Hedge) More than anyone else, Tyler has been all over Goldman for monopolizing program trading at the NYSE. He thinks that Goldman’s sudden disappearance from the weekly table has everything to do with Aleynikov’s arrest. Folks interested in Tyler’s detailed thoughts on the topic should consider going through all his posts labeled program trading.
The Great Goldman Black Box Heist (Alphaville) Some quick analysis from the complain about how Aleynikov was caught.
FBI Arrest may open Goldman’s black box (Daily Kos) More helpful analysis of the news from bobswern.
Oh, by the way, Aleynikov and his wife appear to be competitive ballroom dancers. Check ‘em out….