By Christopher M. Matthews
Prosecutors reversed their position on a key legal issue Friday,
after a New York judge indicated their case against Sergey
Aleynikov, the former Goldman Sachs Group Inc. programmer accused
of stealing the bank's code, could be on thin ice.
Jurors in New York State court began deliberating over Mr.
Aleynikov's fate Wednesday but have struggled with the decades-old
laws under which he is charged with stealing Goldman's
high-frequency trading code. The jury has sent repeated notes to
Justice Daniel Conviser requesting clarifications on legal terms
and asking to have his instructions on the law read back to
them.
From Justice Conviser's view, the confusion stems from the fact
that the prosecutors from the Manhattan district attorney's office
refused to allow the jury to have a copy of his instructions on the
law, often called the "charge." Mr. Aleynikov's lawyer had
requested they have the charge, but under New York rules both sides
have to agree to provide it.
"There's absolutely no question that it's impairing their
ability to reach a fair and impartial verdict," Justice Conviser
said late Friday afternoon after the jury requested another reading
of the charge. "You should agree to give it to them."
Justice Conviser went a step further and said that while he
thought prosecutors were acting in good faith he could potentially
reverse any conviction on this issue. All discussions on the matter
occurred outside the presence of the jury.
After a break, prosecutors said they would agree give the jury
the charge, though they still held the reservations that caused
them to oppose it--namely, that Justice Conviser's instructions are
incomplete.
The trial, now in its third week, ended Friday without a
verdict, deliberations will resume Monday.
Mr. Aleynikov's case has taken a long and winding road to reach
the jury. He was initially arrested and charged by federal
prosecutors in 2009 for allegedly stealing Goldman's
high-frequency-trading computer code from bank computers during his
last days at the firm. He was convicted in 2010 in federal court,
imprisoned for a year, acquitted on appeal and then rearrested on
state charges in 2012 by the Manhattan district attorney's
office.
The district attorney dusted off laws written long before the
advent of the computer age in their case against Mr. Aleynikov, and
the lawyers, the judge and the jury have been wrestling with their
application to this case's facts.
The trial has been unusual in that both sides almost entirely
agree on what took place, but dispute whether New York state law
applies. The three charged counts accuse Mr. Aleynikov of
unlawfully using secret scientific material in order to appropriate
the "major portion" of its economic value as well as duplicating it
for his own use.
He faces up to four years in prison if convicted on all
charges.
Both sides have furiously debated the meaning of the statute's
language throughout the trial, an argument that continued even into
the jury's deliberations.
After a note from the jury Friday asking for clarity on a legal
definition, Justice Conviser asked prosecutors why they thought
"the major portion" of the code's economic value didn't mean the
majority of its value. No witnesses during the trial testified
about precisely how much the code was worth, and Mr. Aleynikov's
lawyer has argued his client didn't appropriate the major portion
of its value because Goldman continued to use the code, and make
money with it, long after Mr. Aleynikov left.
Prosecutors cited case law Friday that said two people could
simultaneously possess the "the major portion" of something's
economic value, such as a credit-card code, for example.
Justice Conviser said he was unconvinced and that they would
continue the debate Monday.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
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