By Christopher M. Matthews
After six years of legal twists and turns, the fate of a former
Goldman Sachs Group Inc. programmer accused of stealing the bank's
"secret sauce" computer code may hinge on the dictionary's
definition of a handful of words.
A lawyer for Sergey Aleynikov told jurors during closing
statements Wednesday that his client did do something wrong when he
took bits of the investment bank's high-frequency trading code, but
his actions aren't covered by the language of the statute under
which he is charged.
While Mr. Aleynikov certainly broke Goldman Sachs's
confidentiality policy when he transferred the code off the
company's servers, defense attorney Kevin Marino told the New York
state court jury, he didn't violate New York state law.
Prosecutors urged jurors during their closing statement to look
past rhetorical minutiae and focus on Mr. Aleynikov's actions.
"We can look at the statute all we want, and you should," said
Manhattan Assistant District Attorney Daniel Holmes. "But at the
end of the day...if you use the same common sense you use every
day, it's clear the defendant made an electronic reproduction of
his former employer's data."
The defense's central argument is unusual. Mr. Marino concedes
nearly every fact presented by the district attorney's office, but
disputes that those constitute a crime.
He focused much of his nearly two-hour closing statement on the
language of the law Mr. Aleynikov was charged under, even
presenting the jury with placards displaying the definitions of
"deprive" and "appropriate." The three charges accuse Mr. Aleynikov
of unlawfully using secret scientific material to appropriate its
economic value and duplicating it for his own use. The jury began
deliberations Wednesday.
He faces up to four years in prison if convicted on all
charges.
On Wednesday, Mr. Marino told jurors that because Mr. Aleynikov
didn't appropriate the code to Goldman's detriment, and because he
didn't intend to profit off it, he didn't break the law. Goldman
continued to use the code and earn profits from its high-frequency
trading system after Mr. Aleynikov transferred some of the code, he
said. What's more, according to Mr. Marino, his client didn't
illegally duplicate the code because he didn't make a tangible copy
of the code because binary computer bytes don't have a physical
form.
Mr. Aleynikov was initially arrested and charged by federal
authorities in 2009 for allegedly stealing Goldman's
high-frequency-trading computer code from bank computers during his
last days at the firm and transferring it to servers under his
control so he could use it at his new employer. He was convicted in
2010 in federal court, imprisoned for a year, acquitted on
appealand then rearrested on state charges in 2012 by the Manhattan
district attorney's office.
The appeals court reversed the conviction on grounds that his
actions weren't covered by the federal statute under which he was
charged. The district attorney charged Mr. Aleynikov under a
different New York state law, a move that didn't trigger "double
jeopardy" immunity.
Still, some have criticized the office for pursuing a second
iteration of the case, and the trial has been marred slightly for
prosecutors by several procedural missteps. On the eve of trial,
after two years of delays, prosecutors asked for another
postponement, which Justice Daniel Conviser denied. Later in the
trial, Justice Conviser barred prosecutors from calling a witness
because they hadn't given the defense proper notification.
Mr. Marino, a firebrand litigator, has repeatedly voiced his
exasperation with the district attorney's handling of the case, a
theme that continued after closing arguments. Shortly after
starting deliberations, the jury asked for a copy of specific
charges against Mr. Aleynikov, a request that is barred under New
York rules unless both sides consent to it. Outside the presence of
the jury, Mr. Marino said he wouldn't object to giving them a copy
of the charges, but prosecutors said they felt otherwise.
"Good grief, let them have the charge," Mr. Marino said.
As it did in Mr. Aleynikov's first trial, Goldman has cast a
shadow over the proceedings. Mr. Marino told jurors Wednesday that
instead of pursuing a civil case against Mr. Aleynikov the bank had
a former agent from the Federal Bureau of Investigation who now
works for Goldman contact his old colleagues and request an
investigation.
Prosecutors have denied that Goldman exerted any improper
influence.
"Guess what, big companies have things stolen from them, and
smart, successful people can be thieves," Mr. Holmes said.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
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