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Did Goldman Sachs Overstep in Criminally Charging Its Ex-Programmer?

samzenpus posted 1 year,16 days | from the all-worked-up dept.

The Courts 186

theodp writes "Programmer Sergey Aleynikov holds the dubious distinction of being the only Goldman Sachs employee since the 2008 financial meltdown to have actually served time in prison. After leaving Goldman, Sergey was accused of stealing computer code from his former employer and sentenced to eight years in federal prison. Exactly what he'd done neither the FBI nor the jury seemed to understand, so Moneyball author and financial journalist Michael Lewis decided to give Sergey a second trial, assembling a jury made up of programmers and people familiar with high-frequency trading, and asking them to level a judgment. Their verdict? Not guilty. 'I think it's quite possible that Goldman itself didn't know what he had taken, the value of it, the purpose of it, or anything else,' Lewis concludes. 'There was such turnover at Goldman, and the system was such a hairball, that I think people knew pieces but they didn't know the whole. Serge might have been as close as there was to an expert on the how the whole system worked. I think the valuable thing that Serge took when he walked out the door was himself.' Aleynikov was released on appeal in 2011, but subsequently re-arrested on state charges the following year, so he's still not out of the woods yet."

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Lemme get this straight (5, Interesting)

Opportunist (166417) | 1 year,16 days | (#44471415)

Of all the people who wasted and squandered the money of thousands, if not millions, nobody did time in prison, the only person who did was actually not stealing from decent people but from the thieves, and for THAT he goes to jail?

Re:Lemme get this straight (5, Insightful)

fustakrakich (1673220) | 1 year,16 days | (#44471455)

The people who do the actual stealing are holding presidential cabinet positions. Can't touch this... If there were such a thing as justice, Goldman Sachs' charter would have been revoked a long time ago.

Re:Lemme get this straight (1)

Opportunist (166417) | 1 year,16 days | (#44471471)

If there was such a thing as justice, I'd make a killing selling rope and pitchforks... literally.

Re:Lemme get this straight (4, Insightful)

fustakrakich (1673220) | 1 year,16 days | (#44471483)

That's vengeance, not justice... Asset forfeiture is sufficient.

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44471517)

Let's not rule out the possibility of having both.

Re:Lemme get this straight (1)

fustakrakich (1673220) | 1 year,16 days | (#44471537)

If it would recover all the stolen money, I would be all for it. "The best revenge against a rich man is to make him a poor man"

Re:Lemme get this straight (2)

noh8rz10 (2716597) | 1 year,16 days | (#44471613)

i htink this is a chance for rehabilitation rather than incarceration, you know? the us justice system is too punitive in my book. why not have all these poeple contribute to society by doing programs for inner city youth or something?

Re: Lemme get this straight (4, Interesting)

OECD (639690) | 1 year,16 days | (#44471693)

You want to change the prison system? Introduce some rich people to it.

Re: Lemme get this straight (3, Insightful)

dragonsomnolent (978815) | 1 year,16 days | (#44471915)

I wish I had mod points, but in lieu of that, I will say ABSOLUTELY! The criminal justice system in the country is completely messed up. The programs don't work (especially 3 strikes laws) and especially with the treatment of addicts (which is a medical condition) being locked up along with rapists and murderers. The fact that prison rape has become a punchline of jokes shows just how screwed up it all is. The entirety of the system needs an overhaul, from laws to prison conditions.

Re: Lemme get this straight (1)

Connie_Lingus (317691) | 1 year,16 days | (#44472555)

... The entirety of the system needs an overhaul, from laws to prison conditions.

right... with all the different entities (lawyers, police, clerks, judges, guards etc) making big big money on the backs of these "criminals", and add to that the fact that lawyers and judges control the "system", do you really imagine that they are interested in the reforms you are talking about?

the only reforms they are interested in are one's that will be put more money (ie more laws more criminals) into their already well lined pockets.

Re: Lemme get this straight (1)

noh8rz10 (2716597) | 1 year,16 days | (#44472713)

solution? go back to a time tested techniques -- minimum security, transportation to elsewhere. eg an island or somethign? one of those aleutian islands in alaska? that would be pretty sweet. maybe the prisoners could run it with their own local gov't and services and such? sounds pretty good to me...

Re: Lemme get this straight (0)

O('_')O_Bush (1162487) | 1 year,16 days | (#44472605)

Quaint, but any rich personal will tell you, connections are more valuable than money.

Re:Lemme get this straight (4, Insightful)

gmuslera (3436) | 1 year,16 days | (#44471543)

If you count the hundreds to millons that lost job, houses, fell into poverty, prostitution, or died at consequences of them getting richer, in all the world, i think that rope and pitchforks below what justice should do. But if you want to point exactly who died, i'd say justice. What happened with them (and the rest of that mafia [rollingstone.com] ) is just the death note for anything that resembles justice in US.

Re:Lemme get this straight (3, Interesting)

pla (258480) | 1 year,16 days | (#44471567)

That's vengeance, not justice...

Sometimes justice means both.


Asset forfeiture is sufficient.

Tell that to all the people who died of starvation because Goldman saw profits in artificially inflating the hard red spring wheat futures market.

No, sometimes "justice" does mean torches and pitchforks. Real monsters just don't take the hint otherwise.

Re:Lemme get this straight (3, Insightful)

fustakrakich (1673220) | 1 year,16 days | (#44471607)

Real monsters have learned that society rewards their behavior. Taking away those rewards will go a very long way to correct the problem.

Re:Lemme get this straight (2)

mwvdlee (775178) | 1 year,16 days | (#44471619)

Asset forfeiture is not sufficient; it does nothing to compensate for consumed assets like holidays, rentals and such.
Nor does it prevent repeat offending.
Nor does it compensate victims.

As a result, any sufficiently large financial crime can never be fully repaid by it's offender.

Re:Lemme get this straight (1)

Opportunist (166417) | 1 year,16 days | (#44472167)

I'd say they have a lifetime to try, it's a good start.

Re: Lemme get this straight (1)

O('_')O_Bush (1162487) | 1 year,16 days | (#44472631)

Typically, sociopaths don't feel guilt, so what makes you think they would try to repay, rather than continue what they were doing?

Re:Lemme get this straight (1)

overlordofmu (1422163) | 1 year,16 days | (#44472025)

You said it. Incarceration for non-violent crimes is detrimental to the individual and collective society. Shooting oneself in the foot, so to speak.

Only the violent belong in cages. Nice ones too.

We are a wealth society. Only violent people go to prison and even then the cages should be nice.

Re:Lemme get this straight (1)

jedidiah (1196) | 1 year,16 days | (#44472193)

The only problem with this is that you will also gleefully cripple Tort law at the same time. The end result is that White collar criminals and corporations are left with no meaningful consequences for their harmful actions. It's not even a theoretical possibility.

Beyond simple theft (3, Interesting)

Livius (318358) | 1 year,16 days | (#44472329)

If a person is deprived of a very large amount of savings, say an amount that exceeds the lifetime productivity of an average wage-earner, that crime should be put on the level of some lesser version of manslaughter. It's gone beyond theft at that point.

Re:Lemme get this straight (1)

bkmoore (1910118) | 1 year,16 days | (#44471623)

If there was such a thing as justice, I'd make a killing selling rope and pitchforks... literally.

As a believer in nonviolence, a nice hot barrel of tar and a lot of feathers would do.

Re:Lemme get this straight (1)

Holi (250190) | 1 year,16 days | (#44471841)

So your for cruel and unusual punishment. A painful and violent one at that.

'In a typical tar-and-feathers attack, the mob's victim was stripped to his waist. Hot tar was either poured or painted onto the person while he was immobilized. Then the victim either had feathers thrown on him or was rolled around on a pile of feathers so they stuck to the tar. Often the victim was then paraded around town on a cart or wooden rail. The aim was to inflict enough pain and humiliation on a person to make him either conform his behavior to the mob's demands or be driven from town. The practice was never an official punishment in the United States, but rather a form of vigilante attack."

That you can say your a believer in non-violence and then approve of mob violence is the height of hypocrisy.

Re:Lemme get this straight (2)

Rockoon (1252108) | 1 year,16 days | (#44471533)

Of all the people who wasted and squandered the money of thousands, if not millions

The closest thing to a currency loss and "squandering" was when the FED started rapidly printing money well beyond what the GDP growth indicated was needed.

Re:Lemme get this straight (0)

reve_etrange (2377702) | 1 year,16 days | (#44471651)

The Fed isn't "printing money," they are conducting asset swaps in which the private sector exchanges one government debt instrument for another with a lower interest rate. The net effect on private financial assets is negative due to the lower interest income.

And even if the Fed were wildly increasing bank reserve balances without buying back bonds from them, it wouldn't matter, because reserves are only used for interbank payments. Banks do not lend out their reserves and their reserve balances do not decrease when they make loans. In fact, reserve requirements do nothing because the Fed must always allow the banks to borrow more reserves or abandon their interest rate target. Look at Canada, which has a very stable banking sector with no reserve requirements whatsoever, and no overnight holdings of central bank reserves.

Prior to the financial crisis, private credit expansion (facilitated but not initiated by Greenspan) led to inflation. When those credit structures collapsed, the supposed financial assets became nearly valueless, which resulted in an epic loss of liquidity. It was the private sector credit expansion which both created the new money and led eventually to that money disappearing. This is in sharp contrast to the "new" (really asset swapped) money from QE, which is "real" government money which can't simply disappear the way private credit can.

Re:Lemme get this straight (2)

Rockoon (1252108) | 1 year,16 days | (#44471675)

This is in sharp contrast to the "new" (really asset swapped) money from QE, which is "real" government money which can't simply disappear the way private credit can.

Tell this to the people with savings. Tell them how the FED creating $80+ billion per month doesnt make the value of their savings disappear.

Re:Lemme get this straight (4, Interesting)

reve_etrange (2377702) | 1 year,16 days | (#44471947)

Their savings are held as bank deposits at private banks. The "money" the Fed is creating is held by the banks as reserve balances at the Fed itself. In our financial system there is only one operational pathway for reserve balances to enter the economy separately from their role in settling interbank payments, which is as physical U.S. currency AKA Federal Reserve Notes. Physical currency represents only a very small fraction of total reserves. Thus, the total size of all reserve balances held at the Fed has no bearing on the traded value of bank deposits denominated in dollars but held in the private sector (that is, the value of your and my savings). Like I said, Canada's banks typically have overnight reserve balances of ZERO, but that doesn't mean Canadians have no deposits at their private banks or that those deposits have infinite value.

Yet, QE does negatively affect the future value of our savings, not by harming the traded value of the dollar, but by reducing our interest income. During QE, the Fed exchanges reserves (bearing an 0.25% interest rate since 2008), which it "prints" (into a database), for securities (bearing ~3% in the case of Treasuries). The net financial assets of the private sector is unchanged, but its average rate of interest is decreased, negatively impacting its future income. Basically, the Fed is helping the government refinance at a lower rate, which is like a wealth tax on the government's creditors (including us, pensions, foreigners, companies, etc.).

TL;DR: QE is a Bad Thing, but because it decreases the amount of money we have and not the opposite.

Re:Lemme get this straight (1)

mrlibertarian (1150979) | 1 year,16 days | (#44472153)

The Fed isn't "printing money," they are conducting asset swaps in which the private sector exchanges one government debt instrument for another with a lower interest rate.

Are you talking about Operation Twist? That began in September, 2011 and ended in December, 2012, and that was always in addition to QE. QE, or quantitative easing, is when the Fed buys fixed-income securities on the open market. So, you are correct that the Fed is swapping assets, if you mean they are swapping "newly printed money" in exchange for "mortgage-backed securities/U.S. Treasuries".

Anyway, have you seen what has been happening to the monetary base [stlouisfed.org] since 2008? If that is not "rapidly printing money", then what is?

Prior to the financial crisis, private credit expansion (facilitated but not initiated by Greenspan) led to inflation.

Greenspan caused interest rates to fall by printing money. Low interest rate, in a system rife with government-created moral hazard (FDIC, Freddie Mac, Fannie Mae, etc.), is a recipe for disaster. The Fed is really less of a firefighter and more of a pyromaniac.

Of course, all of this money printing hasn't led to a big spike in consumer prices, nor has it been able to push the unemployment rate below 7% for almost 5 years now. But, we'll have to see what happens when the Fed starts tapering. My guess is that the economy will start tanking, and then it will be time for QE4. And, much like a drug addict, we'll need a larger dose if we want to stay high. How many doses do we need before stagflation begins? I'm not sure, but I know we'll find out.

Re:Lemme get this straight (1)

the eric conspiracy (20178) | 1 year,16 days | (#44472929)

The monetary base is defined as the portion of the commercial banks' reserves that are maintained in accounts with their central bank plus the total currency circulating in the public (which includes the currency, also known as vault cash, that is physically held in the banks' vault).

The money supply generally far exceeds the monetary base and of the total currency circulating in the public plus the non-bank deposits with commercial banks.

The two are disjoint sets. They are related to each other through something known as the money multiplier. The money multiplier crashed during the recent economic crisis.

http://research.stlouisfed.org/fred2/series/MULT [stlouisfed.org]

Since at present the value of the money multiplier is low, and excess reserves are high the US Fed has little ability to cause the money supply to increase. All it can do is decrease the money supply.

This is why the current contractionary fiscal policy is so bad. The Fed has shot all it's arrows, and the government is cutting spending.

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44471551)

There is no hypocrisy here at all. The banks and corporations rule. The system acknowledges this. This is why the FBI was sent to Seattle to investigate May Day rioters who had vandalized banks (and hold some 'potential' witnesses for a year in solitary confinement) and why Carmen Ortiz attacked Aaron Swartz, but would never think of going after a bank or a corporation (because they make political donations).

The game is rigged.

Re:Lemme get this straight (2)

Seumas (6865) | 1 year,16 days | (#44471599)

Exactly what I clicked on the story to say. Of all the people at Goldman Sachs (and facilitating shadiness on the government-end of the symbiosis), this is the guy they go after?

How about Henry Paulson

Re:Lemme get this straight (4, Informative)

girlintraining (1395911) | 1 year,16 days | (#44471717)

Of all the people who wasted and squandered the money of thousands, if not millions, nobody did time in prison, the only person who did was actually not stealing from decent people but from the thieves, and for THAT he goes to jail?

Actually, that's not even entirely accurate. First, he was borrowing open source software. Goldman Sachs liked this because it meant faster development times, which meant faster profits. They didn't re-release modified code, even if it was only a few lines, of course, violating the licensing terms. Parts of the code he was working on he uploaded to an external server, because his company didn't have a proper code versioning system -- there was no way to track changes being made, and so he utilized an open source repository to store changes to chunks of code he was working on. This wasn't publicly available, it was simply put "in the cloud".

Unfortunately for him, overzealous managers and clueless FBI agents didn't understand what any of this meant, and frequently, and horribly, misinterpreted or misunderstood, what their own experts were telling him. His own attempts to explain what he had done weren't any better understood and were perceived as a confession.

This is a story of how law enforcement was criminally stupid, and believed what a middle-manager with no expertise in the subject and about five layers removed from what he was panic-striken over... that some immigrant they hired was "up to no good", when in truth, it was business as usual. Naturally, the FBI swung into action, believing the worst possible thing -- he was a terrorist, he was trying to destroy america, he was some kind of muslim radical... because the software he used was called Subversion, and when you add in terms like delete, modify, copy, remove... suddenly it looks like a bona fide CSI episode full of shadowy men exchanging pen drives with knowing winks and nods and death to america would surely follow if their crack investigative team didn't interrogate the suspects while brainy people in the forensics lab tossed around complex terminology and zoomed in on single pixels before saying "AH HA! We've got you now! This single pixel here proves he was the murderer!"

Criminal. Stupidity. That was the only crime here. It was CSI: FBI Edition... only without the special effects and soundtrack, and by people with their sense of humor surgically removed, rather than having actual personality and interesting dialogue.

Re:Lemme get this straight (2, Interesting)

Anonymous Coward | 1 year,16 days | (#44471901)

They didn't re-release modified code, even if it was only a few lines, of course, violating the licensing terms.

Ok, I'll pull a "Citation required" card. Please show an OSS license that requires releasing code modifications if you have only just modified a private copy of the code and have not redistributed it. So far as I know, it's usually if you redistribute the software or made a copy publicly available are you to provide the changes.

I mean, is this whole thing a GPL-is-viral kind of blowup on Goldman's part? Does it boil down to Goldman fearing Serge Aleynikov violated GPL (or whatever license) by adding Goldman proprietary changes and pushing the changes to an SVN server outside of Goldman? And they feared it would've required redistribution of the entirety of their trading platform?

Goldman fearing GPL violation more than causing the global financial meltdown? Seriously?

Re:Lemme get this straight (1)

girlintraining (1395911) | 1 year,16 days | (#44472257)

Ok, I'll pull a "Citation required" card. Please show an OSS license that requires releasing code modifications if you have only just modified a private copy of the code and have not redistributed it.

Er, this programmer took a copy, made some modification to it, and kept a copy of those modifications for himself. Under the terms of most open source licenses... this is a permissible act that cannot be restricted in any way. Whether he chooses to publish such a modification or not is a secondary issue. This alone should have provided legal immunity from prosecution in this fashion... it is the company in breach of contract, not the employee. Any such NDA signed by the employee would be legally unenforceable, ergo, not proprietary or trade secret, ergo not covered by the laws he was prosecuted under. IANAL however... maybe the law was just very badly written (or interpreted by people who have no technical training).

That said, "they" loaded multiple copies of his program onto internal servers, thus satisfying the requirements of the term 'distribution'... and obviously this was not for personal/private use... it was placed on a server that executed trades, a rather public thing.

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44472529)

That said, "they" loaded multiple copies of his program onto internal servers, thus satisfying the requirements of the term 'distribution'... and obviously this was not for personal/private use... it was placed on a server that executed trades, a rather public thing.

FYI, deploying software onto your own servers, or servers within your company does not count as 'distribution' in the context of virtually all free or open source licenses, nor is deployment on public facing servers distribution either, as long as those servers are within your organization.

The GNU faq covers this: http://www.gnu.org/licenses/gpl-faq.html#InternalDistribution and other licenses use very similar meanings of distribution.

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44472513)

>>the FBI swung into action, believing the worst possible thing -- he was a terrorist, he was trying to destroy america, he was some kind of muslim radical.

OR just because Goldman had enough connections UP THERE, made some phone calls, and had FBI pick him up. All because they wanted to teach the programmer a lesson.

Once federal judges acquited him, they had their friends in the State go after him.

If the State too is forced to acquit him, they will get someone else to go after him.

Let any other employee think twice before leaving the Brotherhood.

In fact NSA is tracking those who are commenting in his favor here and passing the list to Goldman.

With Goldman, anything's possible.

Goldman & stupid (1)

globaljustin (574257) | 1 year,16 days | (#44472593)

Goldman should have dropped this at some point...or at least tried to get the FBI to leave it alone...it was obvious that it was OSS...

There is reason to be outraged at Goldman for this....and 'what else do you expect' is not a valid response (we are holding people accountable here...we decide what is to be expected)

Goldman Sachs should have used whatever power they had to end this or at least publicly plea for the FBI to end it. The guy did nothing wrong and nothing was to be gained by turning the FBI loose on him.

Criminal. Stupidity. That was the only crime here. It was CSI: FBI Edition...

So Goldman discovers the employee downloaded several files right before ending his tenure there...Goldman thinks it is criminal and calls the cops...specifically the FBI

The programmer, poor guy, knows he hasn't done anything wrong and...FTA:

Serge waived his right to call a lawyer. He phoned his wife and told her what had happened and that a bunch of F.B.I. agents were on the way to their home to seize their computers, and to please let them in—though they had no search warrant, either. Then he sat down and politely tried to clear up the F.B.I. agent’s confusion.

THAT was also 'stupid' as you say...I feel bad for the guy, but it was stupid.

So yeah Goldman is 'stupid' for not knowing that the employee's file downloads were OSS, FBI was 'stupid' for charging this guy with a crime, and Serge himself was stupid for talking to the cops without a lawyer!

The tone of many responses to GP (who was probably trolling I grant) has been to **defend** or at least shrug shoulders at Goldman in this...wrong...it's binary thinking.

This is a complex situation and all parties had a bit of 'stupid' going on

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44472385)

No...it's even worse, if you read TFA. Most of the code that he "stole" was OSS that Goldman had used without ever contributing anything back. It was only Goldman-Sachs code because they systematically remove the original license and replaced it with their own ownership notice.

Re:Lemme get this straight (0)

Anonymous Coward | 1 year,16 days | (#44472411)

I always assumed the real reason he was charged was if you understood the code he took, it would be proof hands down that Goldman Sacks is front running and pushing losses from favored customers to less favored customers.

Re:Lemme get this straight (4, Interesting)

UnknownSoldier (67820) | 1 year,16 days | (#44472485)

You're surprised that banks almost get away with murder and have a fall guy take the blame? This stuff has been going on at _least_ since 2001.

- - -
http://en.wikipedia.org/wiki/Brad_Birkenfeld [wikipedia.org]

In October 2001, Birkenfeld began working at UBS in Geneva, Switzerland, handling private banking, primarily for clients located in the United States. In 2005, he learned that UBS's secret dealings with American customers violated an agreement the bank had reached with the IRS.

He resigned from UBS in October 2005 and provided written whistleblower complaints to Peter Kurer, Head Counsel for UBS, and other UBS senior executives regarding the illegal practices of U.S. cross-border business.

He is the first person to expose what has become a multi-billion dollar international tax fraud scandal over Swiss private banking.[2] Despite his unprecedented, extensive and voluntary cooperation, and registering as an IRS whistleblower, Birkenfeld is the only U.S. citizen to be sentenced to jail as a result of the scandal.

- - -

The fundamental problem is that the majority of people just don't give a crap about Accountability and Transparency and would rather watch their (un)reality TV so they don't have to think or do about how the government -- which is an extension of themselves -- is screwing up one of the greatest nations.

Reminds me of the 'range check' patent war (2)

michael_rendier (2601249) | 1 year,16 days | (#44471423)

When a judge, who coded as a hobby, looked at the attorneys and said that any 9th grader could have written a 'range check'... Jury selection is never to get the most intelligent person in a seat...they want the ones who they can paint the picture for, and have them accept it...

Dumbass Slashdot Editors (2, Insightful)

Anonymous Coward | 1 year,16 days | (#44471425)

"Did Goldman Sachs Overstep in Criminally Charging "

Goldman Sachs can bring criminal charges? Really?

Re:Dumbass Slashdot Editors (1)

ls671 (1122017) | 1 year,16 days | (#44471459)

It wouldn't surprise me at all if they could.

Re:Dumbass Slashdot Editors (2)

gmuslera (3436) | 1 year,16 days | (#44471549)

They have the DOJ and most of the government in their pocket, they can bring law to whoever they want for whatever reason they want. Now, justice, thats another topic, in which country you try to use that word?

Re:Dumbass Slashdot Editors (1)

gl4ss (559668) | 1 year,16 days | (#44471697)

well you can too, if you claim that someone stole something from you... even if it was just ideas, or an algorithm or.. thing is, they couldn't even define what he "stole".. it certainly wasn't money or anything tangible.

Re: Dumbass Slashdot Editors (0)

Anonymous Coward | 1 year,16 days | (#44471731)

Only prosecutors can bring criminal charges. Private parties can only bring civil charges (for money damages, or an injunction, but never jail).

Of course, in America, corporations are apparently exempt from this limitation. The banking industry IS the government.

Re:Dumbass Slashdot Editors (1)

jedidiah (1196) | 1 year,16 days | (#44472227)

> well you can too, if you claim that someone stole something from you...

If YOU personally did this, your local police department and the FBI would likely IGNORE you. They may or may not even humor you about taking the charges seriously. They may tell you to your face that they "aren't going to bother".

When you have a lot of money to throw around and a senator or two in your pocket, THEN they listen to you.

Justice (1)

Anonymous Coward | 1 year,16 days | (#44471439)

Programmer walks out with his brain and gets sent to jail.

Employer rips off and fucks entire economy, gets bonuses.

It's great being a 1%'er in our feudal economy!.

I'm working REAL hard to get born to a better class of parents who will send me to prep schools where I can get a fast track into Harvard , get my Wall Street job, and get my billion dollars.

Wrong reasoning (2)

KiloByte (825081) | 1 year,16 days | (#44471443)

You're assume Goldman Sachs cares about "is this legal?" or "is this right?". What they care is: "will this improve our PR?", "will this scare people from going against us?", "will this scare people from working for us?".

Seryozha was at that point no longer working for Goldman Sachs, and he dared to do something hostile, so he was an enemy who needed to be punished. Extra bonus for telling the masses "another crooked banker in jail" which makes the uninformed feel as if there's a shred of justice left.

Re:Wrong reasoning (4, Insightful)

Jane Q. Public (1010737) | 1 year,16 days | (#44471491)

You're assume Goldman Sachs cares about "is this legal?" or "is this right?". What they care is: "will this improve our PR?", "will this scare people from going against us?", "will this scare people from working for us?".

This is the whole reasons corporations worked to try to make "non-compete" agreements enforceable: to lock in their control of an employee.

And that is why non-compete clauses or agreements are no longer enforceable in California. California did a good thing for a change.

They need to get it through their heads that they do not control the contents of a mind. If they want somebody to "not compete", then the PROPER way to do it is to give them better pay and compensation than the other guy. That's called capitalism.

Pfffft (2)

jeff13 (255285) | 1 year,16 days | (#44471473)

Being called a crook by Goldman Sachs is like being called an anti-Semite by Hitler!

now we know (1)

Connie_Lingus (317691) | 1 year,16 days | (#44471477)

fta...

" “The whole point of the Internet is to abstract the physical location of the server from its logical address.”

so *that's* the point...finally!

and for all this time i've thought its for lolcats and pr0n...

Re:now we know (0)

Anonymous Coward | 1 year,16 days | (#44472125)

... and arguing with strangers about nothing.

May goldman sachs... (0)

Anonymous Coward | 1 year,16 days | (#44471515)

forever choke on their hairball.

He was obviously guilty... (1, Insightful)

runeghost (2509522) | 1 year,16 days | (#44471547)

Guilty of somehow offending Goldman-Sachs. In corporate America, that's more than enough to get him thrown in jail. Anyone who doesn't understand this is deluding themselves about the nature of 21st century American's government and legal system.

not relevant (0)

peter303 (12292) | 1 year,16 days | (#44471559)

the guy copied code onto a memory stick and emailed himself such. doesnt really matter what the files are. grounds for firing and prosecution in many places. dont split hairs on how important the code was or wasnt

Re:not relevant (0)

Anonymous Coward | 1 year,16 days | (#44471827)

How can you "email a memory stick" ?

Just wait for other plcaes to try this BS (1)

Joe_Dragon (2206452) | 1 year,16 days | (#44471561)

BOB if you don't work 80 hours week we can give you put in lock up for taking all the stuff that you know about us in your head out side of this office and there will no more OT pay.

Many places already do this (-1)

Anonymous Coward | 1 year,16 days | (#44471637)

It is called a non-compete agreement.

A second trial (0)

Anonymous Coward | 1 year,16 days | (#44471569)

Exactly what he'd done neither the FBI nor the jury seemed to understand, so Moneyball author and financial journalist Michael Lewis decided to give Sergey a second trial, assembling a jury made up of programmers and people familiar with high-frequency trading, and asking them to level a judgment.

And how was this trial conducted? Did the "jury" get to see all the evidence? Were they instructed on how to rule on the case based on correct interpretation of the law? Or did this guy just line up some cheerleaders and get them to agree with his own conclusion?

The fact that Sergey Aleynikov was the only one tried and convicted does not automatically mean his conviction should be thrown out.

Should we have tech jurys and more jury pay (1)

Joe_Dragon (2206452) | 1 year,16 days | (#44471625)

First off jury pay is slow that for some people it costs more to go to jury duty then it pays.

also who really want to be on a long trial when you can make more working at mcdonalds then the jury pays?

Now for big tech based trails do you really want AOL's, people who fail for the geek squad up sells / monster cables and others to judge on stuff that is way over there head.

Re:A second trial (1)

John Marter (3227) | 1 year,16 days | (#44472799)

Of course they got to see the evidence. They pulled the hard drive out of the computer and showed it to them. It's in the fine article. I wish I could have seen that.

NO (1)

mjwalshe (1680392) | 1 year,16 days | (#44471587)

Goldman Sachs didn't charge him with anything the state charged him.

Re:NO (2)

Black Parrot (19622) | 1 year,16 days | (#44471705)

Goldman Sachs didn't charge him with anything the state charged him.

The state is merely an instrument of our financial-pharmaceutical-defense-burgerflippial complex.

Re:NO (1)

mjwalshe (1680392) | 1 year,16 days | (#44472027)

remind me again is it the lizard men or the alien space bats that are the ones behind the NWO

Re:NO (1)

bunratty (545641) | 1 year,16 days | (#44472175)

I hope so. Without that complex, we wouldn't be able to grow and distribute food and other necessities. I would certainly hope all world governments do their best to make sure the complex works even better, and then we can all enjoy a higher standard of living. Why is this "complex" the enemy? Where do you think you get all your nice stuff that our ancestors didn't have? Let me know when you no long purchase any products made from the evil "complex".

Re:NO (1)

the eric conspiracy (20178) | 1 year,16 days | (#44472657)

Yes, but the parent is still correct.

waived right to attorney (1)

globaljustin (574257) | 1 year,16 days | (#44472687)

first of all, this isn't like a domestic abuse case where the cops **have** to prosecute if they have evidence even if the 'victim' doesn't want it...

jeez...

Goldman could have tried to get the FBI off his back...even gone public...at least send a letter saying after review the files were legal, OSS...

From TFA:

Serge waived his right to call a lawyer. He phoned his wife and told her what had happened and that a bunch of F.B.I. agents were on the way to their home to seize their computers, and to please let them in—though they had no search warrant, either. Then he sat down and politely tried to clear up the F.B.I. agent’s confusion.

The state was handed a case on a platter...I feel sorry for the guy b/c he knew he'd done nothing wrong, but still, as criminal justice goes in the USA in 2013, most jurisdictions will prosecute you as a matter of course if there is something on paper that looks like an admission of guilt.

Some FBI guy, and the US attorney's office, they don't know Erlang or about high speed trading...but they **do** know they have a statement from the suspect that could be a confession.

That's when it goes to a jury.

I'm not saying it is right, but it is fairly common knowledge among people who follow criminal justice topics that this is the case. I want more discretion at all levels...but you're giving Goldman a pass here.

Goldman has alot of sway and credibility...they could have tried to get the FBI off this guy's ass...sent a letter at least!

Time for Tech / IT unions (2)

Joe_Dragon (2206452) | 1 year,16 days | (#44471595)

Some places have gone way to far and works have no one to stand up for them and even quitting can be seen as planting an time bomb even if all it is stuff that you do day to day that after you quit does not happen and it's leads to an big fail.

Re:Time for Tech / IT unions (0)

Anonymous Coward | 1 year,16 days | (#44471689)

Ahhh yes cause having unions leach off everyone is the way to fix the fucked up laws. Unions thankfully is one thing IT workers have prospered without. Haven't you ever wondered why the highly educated and highly skilled and generally highly paid sections of the market aren't unionized.

Re:Time for Tech / IT unions (1)

Lumpy (12016) | 1 year,16 days | (#44471823)

IT highly paid? What drugs are you taking?

Re:Time for Tech / IT unions (1)

Billly Gates (198444) | 1 year,16 days | (#44472093)

IT highly paid? What drugs are you taking?

Programmers can earn as high as $60,000 a year! FYI that is how much an CPA accountant earns iwth a masters degree.

If you think that is oddball go talk to the HR ladies or teachers and policeman or your neighborhood grocery store manager and ask how much they make? I guarantee you it is lower and many work 60 - 70 hours a week just to keep their $36,000 a year jobs!

That is the new norm for wages right now in the US. Executives and directors get paid more but they are a minority. I.T. pays good and goes who just answer phones all day can make up to at least $36,000 a year which is excellent for help desk departments too which is the lowest of all I.T. jobs.

Re:Time for Tech / IT unions (0)

Anonymous Coward | 1 year,16 days | (#44472531)

Programmers can earn as high as $60,000 a year!

Your numbers are quite a bit off. I don't know many programmers that don't make 6-figures. And many, like myself, make more than twice that. The programmer in question was just about to start a job making 7-figures.

$60k/year? Wow...I made that right out of school 15 years ago and it took me 3-4 months to realize just how underpaid I was.

Re:Time for Tech / IT unions (1)

Anonymous Coward | 1 year,16 days | (#44472601)

I make $38,000 a year with no benefits.

Times have changed in this new economy. In Florida no one wants to pay anything and they base their wages off of Indian workers as they figure an h1b1 visa can work that low if I will not.

$60,000 a year is unheard of from a kid fresh out of school. To me your post confirms you do not need a union. I know many college grads making $22,000 a year at a starbucks because they graduated in 2009 and no one wants to hire them for anything more.

You sir live in a bubble.

Re:Time for Tech / IT unions (1)

Anonymous Coward | 1 year,16 days | (#44472935)

You are in IT, not computer science. There is a difference, not just the pay.

Re:Time for Tech / IT unions (1)

Billly Gates (198444) | 1 year,16 days | (#44472049)

Unions are for people with no bargaining power. Either do X for Y pay or I will find someone else who will !! ...etc

As a programmer if some asshole boss tells you that you have the power to say OK and walk out the door. There is a shortage of I.T. workers across North America if you read the news outside of slashdot. There is demand and employers reluctantly paying as high as $55k a year plus health benefits! If your jaw dropped reading this because that sounded waaay too low and laughable ... go be a teacher instead?

See how much a teacher earns? Or a policeman? Or any white color job outside a few MBAs or Lawyers? You all have the bargaining power and if you choose to work hard and specialize you can charge $150,000 as a consultant too after 10 years of experience and an advanced degree.

You do not need a union. If you were foolish enough to dare try it and demand every JR programmer get 5 weeks off a year plus $80,000 starting off you would find Indians coming to your office the following week on H1B1 visas and you and your buddies being handed pink slips out the door while they sit in your cubicles. Don't be silly. True you can argue your work is higher quality but no one is willing to pay more than $100,000 a year for it (That is how much a $60,000 a year employee costs + taxes + obamacre + other fixed cost expenses).

This programmer got greedy and wanted to earn $180,000 a year and go into some shady things. Yes HFT is shady and the risks are great and you have a ton of liability on your head if you fuck up! That is why they pay a lot and why many such as myself would not do it.

 

Morale of the story (2)

Registered Coward v2 (447531) | 1 year,16 days | (#44471603)

Always get a lawyer before talking to the law.

Re:Morale of the story (1)

fustakrakich (1673220) | 1 year,16 days | (#44471635)

No, the moral of the story is: become well connected (too big to fail/jail) and don't get caught.

Re:Morale of the story (2)

hawguy (1600213) | 1 year,16 days | (#44472197)

Always get a lawyer before talking to the law.

No, the moral of the story is: become well connected (too big to fail/jail) and don't get caught.

That's a bit like saying "Become rich", easier said than done. But the parent poster is correct when he says "Don't talk to the law". It can do nothing to help you, and as the police will tell you when they arrest you, anything you say can and will be used against you".

http://www.youtube.com/watch?v=6wXkI4t7nuc [youtube.com]

The title is a question (0)

bunratty (545641) | 1 year,16 days | (#44471639)

http://en.wikipedia.org/wiki/Betteridge's_law_of_headlines [wikipedia.org]

"Did Goldman Sachs Overstep in Criminally Charging Its Ex-Programmer?"
No.

Re:The title is a question (0)

Anonymous Coward | 1 year,16 days | (#44471695)

Thank you for that witty and completely profound contribution to this discussion.

Re:The title is a question (0)

bunratty (545641) | 1 year,16 days | (#44472479)

I think it *is* insightful. If they overstepped, why wouldn't the article just come out and say they did? So they use a loaded question, such as asking, "Have you stopped beating your wife yet?" That's why Betteride's law works, and is in fact insightful, if you only think about it...

Does Betteridge's law of headlines always apply? (2)

recrudescence (1383489) | 1 year,16 days | (#44471845)

No.
PS. Note how the title of this post is also a question.

Do you have a dick? (0)

bunratty (545641) | 1 year,16 days | (#44471967)

No. See, I can do it too. Do I get a medal?

I used to agree with them... (1)

LordNacho (1909280) | 1 year,16 days | (#44471745)

But I'm in two minds. The old rationale was that code is just code, and he was merely getting his hands on something he could have typed out himself given enough time. Which is probably true. The guy's an expert, and he knows how the thing works, so maybe he's saving himself a few weeks of work (In fact, he says he wasn't even going to use it...). I don't buy the whole thing about gaining an advantage in the market and all that. Whatever strengths and weaknesses are in GS's system would be clear to any expert, and they probably have enough staff turnover that more than a few people knew how it worked.

So I don't think GS was made all that much worse off by him doing this.

My objection to his behaviour is very little to do with the technical stuff. Simply put, you have an agreement to behave a certain way when you're employed. If you break the agreement, there should be some sort of restitution. Suppose you're a chef at a bakery, and you move on to a steak restaurant. Well, you shouldn't take the cookie recipe with you, even if you're not going to use it. Was it common practice to send code home? Maybe, I don't know. I suppose there's a question of whether he was told not to.

One thing that does smell is that GS seemed to want to make an example of this guy. Which of course they should if he's done something wrong. But then all the programmers there will now be wondering whether they'll come after them if they decide to leave.

Moral of the story... (1)

Lumpy (12016) | 1 year,16 days | (#44471809)

DO NOT work as a programmer for the Financial world. Screw those crooks, let them rot and die in technology hell.

Re:Moral of the story... (1)

Billly Gates (198444) | 1 year,16 days | (#44472123)

One of my moral ethical rules for myself (others should adopt) is not to do business with bad people.

How many of you know better than to deal with a crocked used car salesmen who sales he is a bad guy to the seller so he can give you an even better deal! You know he will screw you too.

Many who work in the financial industry know this and feel they can screw others back and still get ahead. Many programmers feel they can win and get paid $180,000 a year by being a shark themselves as big money can be made for their bigger sharks above.

But in the end it is a gamble where it is set against you. You didn't think the big sharks with vacation homes in the Caymen Islsands got there from being nice guys and rewarding those who got them rich did you? No, they get it from taking their money.

Mob owned businesses, payday loan places, cigarette companies, and places like this I avoid and so should every slashdotter whether they want to work for them or do business.

Wait, what? (1)

whoever57 (658626) | 1 year,16 days | (#44471811)

He pulled up his browser and typed into it the words: Free Subversion Repository. Up popped a list of places that stored code, for free, and in a convenient fashion. He clicked the first link on the list. The entire process took about eight seconds. And then he did what he had always done since he first started programming computers: he deleted his bash history. To access the computer he was required to type his password. If he didn't delete his bash history, his password would be there to see, for anyone who had access to the system.

What? It is possible to put your password on the command line with subversion, but why would you do that if you are going to delete your history? Why not just let subversion prompt for a password (or use a keyring to store it)?

Re:Wait, what? (0)

Anonymous Coward | 1 year,16 days | (#44472095)

He pulled up his browser and typed into it the words: Free Subversion Repository. Up popped a list of places that stored code, for free, and in a convenient fashion. He clicked the first link on the list. The entire process took about eight seconds. And then he did what he had always done since he first started programming computers: he deleted his bash history. To access the computer he was required to type his password. If he didn't delete his bash history, his password would be there to see, for anyone who had access to the system.

What? It is possible to put your password on the command line with subversion, but why would you do that if you are going to delete your history? Why not just let subversion prompt for a password (or use a keyring to store it)?

I'm not an svn user, but according to the release notes on http://subversion.apache.org/docs/release-notes/ [apache.org] , storing paswords on keyring wasn't a feature until 1.6, which was released March 20, 2009. He apparently uploaded the code changes around that time, but may not have been using that latest-and-greatest release.

Even rm ~/.bash_history isn't failsafe security since the temp copy is sniffable on nfs (in cleartext!) before the end of the session.

Re:Wait, what? (0)

Anonymous Coward | 1 year,16 days | (#44472409)

maybe you should just add this to the svn command:
  && history -c

Re:Wait, what? (2)

hawguy (1600213) | 1 year,16 days | (#44472275)

He pulled up his browser and typed into it the words: Free Subversion Repository. Up popped a list of places that stored code, for free, and in a convenient fashion. He clicked the first link on the list. The entire process took about eight seconds. And then he did what he had always done since he first started programming computers: he deleted his bash history. To access the computer he was required to type his password. If he didn't delete his bash history, his password would be there to see, for anyone who had access to the system.

What? It is possible to put your password on the command line with subversion, but why would you do that if you are going to delete your history? Why not just let subversion prompt for a password (or use a keyring to store it)?

I've deleted my bash history after inadvertently or purposely typing a password into a command line -- sometimes putting the password on the command line is the most expedient way to get work done, despite it being a bad idea from a security standpoint -- and sometimes I'll mistype a hostname on an ssh command, but have already typed my password or ssh key passphrase and it ends up being entered as a command (good thing I never user "rm -rf /" as a password). Well, rather than delete the whole history, I usually run "history -r" to replace my history with the last saved history.

Though if the company really wants to see what a user has done, looking at the bash history is a very weak way to do it since anyone can edit their own bash history - they should be running something like auditd that sends command execution logs to a separate server that the developer doesn't have access to.

The big bankers' myth of value. (1)

whoever57 (658626) | 1 year,16 days | (#44471831)

The article clearly lays out how the programmers are responsible for the big profits, not the bankers who did not even understand what the programmers were doing. But who got the multi-million dolar bonuses?

Re:The big bankers' myth of value. (1)

bunratty (545641) | 1 year,16 days | (#44472285)

Yeah, that's exactly how the world works. Nice observation. Fair is a temporary amusement park.

Any libertarians going to defend GS? (1)

rsilvergun (571051) | 1 year,16 days | (#44472187)

Just curious. They're such a powerful organization that it's difficult to imagine anything short of a strong Federal Gov't reigning them in. I know the argument is that they can only survive because of a Strong Federal Gov't favoring them, but I really see that as a chicken/egg situation. In this case I think they GS chicken came first. e.g. the gov't is a convenient tool for them but in it's absence they'd have plenty of other ways to exercise leverage on us all. They control a good chunk of all wealth in this country after all, and in general you do what the Rich guy says because if not you get fired, and in America your entire quality of life depends on your job. The golden rule: He with the Gold makes the Rules.

So I say again, any Libertarians gonna step up for 'ole GS?

free subversion repository? (1)

grahamsaa (1287732) | 1 year,16 days | (#44472229)

Goldman Sachs wasn't equipped to host their own repository? For code that is supposedly proprietary, valuable and highly sensitive? That's pretty shocking. Either this guy violated company policy by using a free repo host when he was explicitly told not to, or whoever is responsible for IT infrastructure at Goldman should be fired for incompetence. Hosting your own repo is easy enough, and trusting a free repo host for sensitive code is about as stupid as using a pastebin to share medical records.

Re:free subversion repository? (0)

Anonymous Coward | 1 year,16 days | (#44472489)

This was not an external repo for all of Goldman's stuff. It was supposedly only the parts of OSS stuff he cared about.

So many rat bastards to go after, and they go afte (0)

Anonymous Coward | 1 year,16 days | (#44472327)

So many rat bastards to go after, and they jump on the tech guy because he's the only one smart enough to know how it all works. Clearly he's not the one calling the shots, but we have a negotiated truce with the real rat bastards stealing money left and right, and the tech guy probably hasn't attempted to steal anyones life savings.... so the feds go after him. Fucking cops! Brain dead judge, and critically moronic jury. What we don't understand, we fear. Once again, the US legal system does not fail to disgust me.

Justice (3, Interesting)

Pino Grigio (2232472) | 1 year,16 days | (#44472551)

How many Goldman executives are currently serving time in prison? If the answer is zero, then I'm pretty sure there's something wrong with the legal system.

Re:Justice (1)

the eric conspiracy (20178) | 1 year,16 days | (#44472707)

No, it isn't zero.

Rajat Gupta, ex GS board member is serving time.

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