

Russian programmer fights Goldman Sachs and wins one round - gkuan
http://blogs.marketwatch.com/thetell/2013/10/22/russian-programmer-fights-goldman-sachs-and-wins-one-round/?mod=MW_home_latest_news

======
lambda
If anyone's interested, I found the appeals court ruling finding him not
guilty of violating federal law, and leading to his release, on PACER,
uploaded to the Internet Archive so you can access it without a paywall via
RECAP:

[https://ia700209.us.archive.org/9/items/gov.uscourts.nysd.35...](https://ia700209.us.archive.org/9/items/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.165.0.pdf)

The basic argument hinges on the three counts, related to three laws he was
alleged to have broken: the Economic Espionage Act, the National Stolen
Property Act, and the Computer Fraud and Abuse act. The third charge was
dismissed by the district court because it rested on the fact that he had
either accessed systems he was not authorized to or exceeded authorized
access. However, he was authorized to access the source code in question, and
what he did with it afterwards has no bearing on whether he exceeded his
authorization, so it doesn't fall under the CFAA.

The district court did convict him on the first two counts, but the Appeals
Court reversed. Their argument is that the National Stolen Property Act
doesn't apply because it applies only to actual physical goods, not mere
intangible ideas. Had he photocopied the source and walked out with it, or
loaded it onto a thumb drive at the office and taken that with him, it would
have counted as stealing a physical good, but merely uploading it to a server
and downloading it onto a thumb drive later does not count.

The court further argues that he did not violate the Economic Espionage Act
because the clause in question he was prosecuted under specifically requires
that the "trade secret ... is related to or included in a product that is
produced for or placed in interstate or foreign commerce". Since Goldman
Sachs' HFT trading system entirely proprietary and internal and not produced
for or placed in interstate commerce, that particular law does not apply.
Apparently Congress specifically intended this restriction, because earlier
drafts of the statute had broader language that merely included "proprietary
economic information having a value of not less than $100,000". The fact that
Goldman Sachs uses the product for interstate commerce is not compelling, it
had to itself be produced for or placed in interstate commerce.

That last part is interesting. It implies that if you run proprietary,
internal code that is not sold or intended to be sold in the future, you
appear to lose federal criminal trade secret protections. It's interesting
that they tried to prosecute him on theft, trade secret infringement, and
exceeding authorized access, but not copyright infringement. From my reading
even unpublished work is subject to copyright.

Neither the original conviction nor the appeals court opinion ever addressed
the copyright issue. In order for him to have stolen something, it would have
had to be something of value; so why wasn't he further prosecuted for
copyright violation? From the documents I read (not all are available on
PACER), the copyright question never even came up.

More documents from the case:

Motion to dismiss the original case in district court:
[https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.35...](https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.46.0.pdf)

Government's response to the motion:
[http://www.archive.org/download/gov.uscourts.nysd.358303/gov...](http://www.archive.org/download/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.50.0.pdf)

Affadavit of the investigating officer:
[http://www.archive.org/download/gov.uscourts.nysd.358303/gov...](http://www.archive.org/download/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.50.1.pdf)

District court's opinion dismissing the third count but refusing to dismiss
the first two:
[https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.35...](https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.58.0.pdf)

List of files requested in discovery, to demonstrate that what he took was
insubstantial and not proprietary:
[http://www.archive.org/download/gov.uscourts.nysd.358303/gov...](http://www.archive.org/download/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.35.0.pdf)

A few of the things he had downloaded were their version of the Erlang
platform, which is available under the Erlang Public License, a derivative of
the Mozilla Public License. So it would be more fruitful to debate the merits
of that license, not the GPL.

All of the currently uploaded items in the docket:
[https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.35...](https://ia600209.us.archive.org/9/items/gov.uscourts.nysd.358303/gov.uscourts.nysd.358303.docket.html)

~~~
sillysaurus2
Is he on trial again after an appeals court already found him not guilty? The
article is a little unclear on that point. First it says he's suing Goldman to
recoup losses, and then at the end it says:

 _Aleynikov has pleaded not guilty and is waiting for his trial in New York
State Court._

Does "not guilty" refer to the trial in which he's suing them? Or is there
another trial even though he's already been found not guilty (double
jeopardy)?

~~~
sanxiyn
United States recognizes a legal doctrine of dual sovereignity, so a state can
try what the federal government already tried.

~~~
tsaoutourpants
...also known as "we carved yet another exception into the clearly worded text
of the Constitution"

~~~
rayiner
The Bill of Rights, like most of the Constitution except clearly identified
provisions, wasn't originally intended to apply to the states. It was only in
the 20th century that the Supreme Court started the process of incorporating
provisions of the Bill of Rights to the states via the equal protection clause
of the 14th amendment (which was a reconstruction amendment explicitly
imposing restrictions on the states).

So the clear text of the Constitution, as the drafters understood it, did not
prohibit concurrent federal and state criminal trials for the same crime.
Indeed, it imposed no limits on state criminal procedure at all. No due
process, no nothing.

------
downandout
It's very clear that Goldman is trying to punish him for leaving, while
sending a message to their other programmers that if they leave, their lives
will be ruined. Even if this guy ultimately wins the state trial, he will
never get back the years he has spent fighting it. Goldman has already won,
and in this case that is appalling.

~~~
melling
No, it's very clear what he did was wrong. He works in an industry that does
not allow you to email code home or copy it off of company computers. Goldman
might be a little different, but where I've worked, this was definitely a no,
no, and you could easily be fired for doing it.

~~~
downandout
According to the original article, Goldman was actually violating the license
terms of the open source software it had modified by _not_ releasing it.
Further, while you and I may have our opinions, a judge found Goldman's
actions to be so egregious that he ordered them to pay the defense costs for
someone accused of stealing from them. That is exceedingly rare, and wouldn't
have happened if there were any doubts about either Goldman's conduct or the
intentions of the programmer.

~~~
Amadou
_Goldman was actually violating the license terms of the open source software
it had modified by not releasing it._

I down-voted you because people keep saying that and it is false.

The Vanity Fair article uses the qualifier "possibly" when talking about GS
violating the licenses and that's because none of the major license families
(BSD, GPL, MPL, etc) have a requirement to release modifications if the whole
is not released outside the organization that made them. The Vanity Fair
article does not say that the code was ever distributed out of Goldman.

[http://www.vanityfair.com/business/2013/09/michael-lewis-
gol...](http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-
sachs-programmer)

~~~
btilly
And none of them have that requirement because distribution inside of an
organization does not count as a distribution for the purpose of copyright
law. (Though if you let people carry it out of the organization, that's a
different story.)

------
Mikeb85
For everyone bringing up the GPL licence, strait from the horse's mouth:

> The GPL does not require you to release your modified version. You are free
> to make modifications and use them privately, without ever releasing them.
> This applies to organizations (including companies), too; an organization
> can make a modified version and use it internally without ever releasing it
> outside the organization. But if you release the modified version to the
> public in some way, the GPL requires you to make the modified source code
> available to the program's users, under the GPL.

[http://www.gnu.org/licenses/old-
licenses/gpl-2.0-faq.html#GP...](http://www.gnu.org/licenses/old-
licenses/gpl-2.0-faq.html#GPLRequireSourcePostedPublic)

Distributing the code within a company/organization does NOT constitute
'distribution', and does NOT require you to release your code.

Edit - and in the licence itself - Version 3 of the GPL

> “The Program” refers to any copyrightable work licensed under this License.
> Each licensee is addressed as “you”. “Licensees” and “recipients” may be
> individuals or organizations. And

> To “propagate” a work means to do anything with it that, without permission,
> would make you directly or secondarily liable for infringement under
> applicable copyright law, except executing it on a computer or modifying a
> private copy. Propagation includes copying, distribution (with or without
> modification), making available to the public, and in some countries other
> activities as well.

[http://www.gnu.org/copyleft/gpl.html](http://www.gnu.org/copyleft/gpl.html)

~~~
revelation
Organization seems like an odd qualifier. Certainly you have to make the code
available to everyone you delivered modified binaries to, and at GPL
conditions (meaning they are then free to further distribute it, per GPL)?

~~~
Mikeb85
Not according to the GSF's website. Besides, let's face it, GS employees
likely don't have any 'secret' code anywhere near their computers. It likely
lives on their mainframes, and only there.

~~~
revelation
Well, it's an FAQ, it's a simplification, not the actual legally binding
license.

I can't find any mention of "organization", but I do find these parts (GPLv2):

 _3\. You may copy and distribute the Program (or a work based on it, under
Section 2) in object code or executable form under the terms of Sections 1 and
2 above provided that you also do one of the following: [give access to the
sourcecode]_

Meaning everyone you distribute a copy to, you have to give access to the
sourcecode, too, or provide instructions on how to get the sourcecode.

 _6\. Each time you redistribute the Program (or any work based on the
Program), the recipient automatically receives a license from the original
licensor to copy, distribute or modify the Program subject to these terms and
conditions. You may not impose any further restrictions on the recipients '
exercise of the rights granted herein._

Meaning distributing the program to someone gives them the full rights under
the GPL.

(IANAL, so I'd be very pleased to be corrected here. Maybe the FAQ made the
assumption that corporations have other means to keep employees from
exercising GPL rights? Or maybe the license is _to the corporation_ as a
whole, and it itself can't break the GPL unless it distributes it to different
entities?)

~~~
Mikeb85
From section 0 of the GPL v3

> “The Program” refers to any copyrightable work licensed under this License.
> Each licensee is addressed as “you”. “Licensees” and “recipients” may be
> individuals or organizations.

And

> To “propagate” a work means to do anything with it that, without permission,
> would make you directly or secondarily liable for infringement under
> applicable copyright law, except executing it on a computer or modifying a
> private copy. Propagation includes copying, distribution (with or without
> modification), making available to the public, and in some countries other
> activities as well.

[http://www.gnu.org/copyleft/gpl.html](http://www.gnu.org/copyleft/gpl.html)

------
OldSchool
This type of story underscores my Icarus-inspired philosophy in business: fly
high but not so high that you become an obvious target or otherwise risk
getting burned.

I learned relatively early that above some level (that's not even all that
high), you'll find that you're dealing primarily with people whose sole
purpose in life seems to be to serve their love of money and quest for
validation. They are like insects drawn to a light and about as thoughtful.

Suffice to say that when you find that you have to play harder and harder to
make up for the stress of your daily work life, it's time to take a look at
what you really want and why you're doing what you're doing.

~~~
debt
Truth. I was talking stocks with my girlfriend. She thought it was too scary
to get involved in something as potentially volatile as the stock market. I
told her basically what you just described.

There are many people in business that are literal sociopaths. They will bury
and burn any and all barriers on their path to making an increase in share
price. "I will not let this company flounder on my watch!", they
hypothetically say in my mind. To these mythical business people, the share
price is an extension of their character. Maybe that's a bit extreme and
that's not why I'm investing.

But it's why the market doesn't scare me. Too many sociopaths all want one
thing: the numbers to go up.

I know I'm right too. Just rewind to 2002-2008.

------
rdtsc
Sergey is a good Erlang programmer.

He is active in on the Erlang mailing list. He wrote a cool C++ to Erlang
interface. Here is his Github account:

[https://github.com/saleyn](https://github.com/saleyn)

I am happy for him. He is a great asset to the open source community.

~~~
davidw
Yeah, I didn't put two and two together until after reading the Vanity Fair
article, but I'd been interacting with Sergey because we're using erlexec in a
project:

[https://github.com/saleyn/erlexec/commits/master?page=2](https://github.com/saleyn/erlexec/commits/master?page=2)

Nice, and helpful person.

------
jaryd
For those that are interested in the backstory:
[http://www.vanityfair.com/business/2013/09/michael-lewis-
gol...](http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-
sachs-programmer.print)

~~~
VladRussian2
> during which time he sent himself, through a so-called “subversion
> repository,”

i just can imagine how every FBI agent jumps when reading that there is a
whole repository of subversion (or subversions?) out there.

------
merraksh
_which time he sent himself, through a so-called "subversion repository," 32
megabytes of source code from Goldman’s high-frequency stock-trading system._

I can't help smile at the thought of what non-CS people might mistake a "
_subversion_ repository" for.

~~~
vidarh
Just imagine the reactions you can get from talking about daemons reaping
zombie children... Though given how mainstream gory video games have become,
talking about Unix process management in public doesn't sound quite as
shocking as it used to.

------
patmcguire
The Michael Lewis article, which is more or less required reading on this:
[http://www.vanityfair.com/business/2013/09/michael-lewis-
gol...](http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-
sachs-programmer)

------
oofabz
Aleynikov has lived in the US for twenty years and owns a house in Chicago. It
sounds to me like he is an American programmer, not a Russian programmer. I
don't see why his ancestry is relevant.

~~~
smtddr
My parents owned a home and lived in USA for over 30 years... but they are,
and will always be, Nigerian. Home is where the heart is. I wonder what
Aleynikov would say if we asked him "Are you American or Russian? Or both?"

~~~
axc123
How does that make his ancestory relevant in this case to be quoted ?

~~~
salemh
It doesn't, the "Russian programmer" stuck out to me like a jibe as well. It
isn't noteworthy, and strange they call it out so often.

------
eliteraspberrie
It seems Goldman Sachs attempted to commandeer the criminal justice system to
retaliate against a former employee, and succeeded in doing so. It is not in
the jurisdiction of police to act as arbiters of employment disputes -- that
is for the civil court system. Whatever the allegations against Mr. Aleynikov,
this I am sure we can all agree on.

~~~
fatca
The fact that they initially sentenced him to 8 years in jail, has zero
deterring effect. As far as I am concerned, it only strengthens our resolve to
break through the politically controlled monopoly on the use of force.

------
shmerl
Here is the story covered in more detail:
[http://www.vanityfair.com/business/2013/09/michael-lewis-
gol...](http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-
sachs-programmer)

~~~
fnordfnordfnord
Here is a page that was set up for him last year. Looks as though it hasn't
been updated in a while.
[http://www.aleynikov.org/](http://www.aleynikov.org/)

------
rcarrigan87
The real tragedy is how many brilliant and motivated people end up in finance
nowadays and how the industry overall continues to grow into an ever greater
portion of the US economy. I'm not belittling the role of finance in an
advanced economy. But you would think with the incredible advances we've made
in electronic exchanges and the free flow of information on the internet the
role of finance would have taken a backseat. Unfortunately, Sergey is just
another example (guilty or not) of wasted talent down the financial sink hole.

------
sanxiyn
Let me quote from Wikipedia here:

"On 8 September 2005, the Seoul Central District Court ruled that the GPL was
not material to a case dealing with trade secrets derived from GPL-licensed
work. Defendants argued that since it is impossible to maintain trade secrets
while being compliant with GPL and distributing the work, they are not in
breach of trade secrets. This argument was considered without ground."

------
brunooo
Guess the Michael Lewis story (damn, he should write more again) also explains
the commits to
[https://github.com/goldmansachs](https://github.com/goldmansachs) a few
months ago.

------
eddie_the_head
How is this not double jeopardy?

~~~
msandford
Double jeopardy is to conceptually prevent a person from going free, but then
being tried again and convicted. The idea is "once you're acquitted, you're
acquitted" That wouldn't be the case here since he was already convicted so
additional trials could only benefit him.

But really it's a judge ruling that the original trial was all effed up and
that a new trial would need to take place in order to do justice.

~~~
jessaustin
This is right in general but wrong on the specifics of this case. The Second
Circuit Court of Appeals ruled on the original, federal trial. That court
threw overturned the conviction entirely; it did not order a retrial.

The state prosecution was an entirely different matter, which is why they had
to strain to pretend it wasn't double jeopardy. The "acts" were the same but
they had decided to classify them as different, lesser crimes. In fact he had
already served more time than he could have been sentenced under those,
rendering the whole proceeding nothing more than a farcical publicity stunt.

~~~
msandford
Good thing I'm only friends with lawyers from grad school rather than one
myself.

------
xerophtye
Umm.... let me get this straight, GS is required to pay the legal fees because
he was an employee at GS? So if the company sues one of its employees, it has
to pay for both sides? Really?

PS: If i remember correctly, hadn't Sergey resigned from GS by then? I thought
he was just hanging around an extra week or two to train his successors.

~~~
warfangle
It's actually fairly common throughout the western world that the loser of a
civil suite must supply legal fees.

~~~
tanzam75
> _It 's actually fairly common throughout the western world that the loser of
> a civil suite must supply legal fees._

It is uncommon in the United States. Which is why it's surprising.

In the last 200 years, American common law has diverged a great deal from
British/Commonwealth common law, both in the law itself, and in how it's
practiced.

------
ig1
A lot of the comments here seem to be oblivious to the details of the original
indictment:

[http://online.wsj.com/public/resources/documents/021110aleyn...](http://online.wsj.com/public/resources/documents/021110aleynikovindictment.pdf)

It pretty explicitly details how the "backup" program he wrote had flags to
select what to copy and some of those flags specifically copied GS option
pricing code that he had never worked on.

~~~
Amadou
That's not what I see when I read it.

I see that he wrote a backup script that could backup two distinct groups of
files depending on what argument he passed on the command-line.

While the indictment mentions that some of the files included stuff he didn't
work on, it doesn't say he set flags specifically to grab stuff he hadn't
worked on. Only that it was getting swept up as part of a larger backup
operation.

It also said he ran the backup on many occasions throughout his employment at
Goldman. That doesn't sound like someone who only absconded with code after he
got an offer to work at a competitor.

As an aside -- I'm wondering if "the website" referenced in the filing was
rapidshare. Weren't they in Germany?

~~~
ig1
I don't think your comment and my comment fundamentally agree. There are two
issues at play here:

1) Did he copy propriety GS code that he had no involvement with. A lot of
people seem in this thread seem to think he didn't, but as far as I can tell
from the indictment it's pretty explicit that he did and I don't think that
it's disputed by either side.

2) Was his intention out of malice (intention to steal trade secrets),
stupidity or something in between.

The first is the point I'm making without commenting on the second.

------
poof131
Question: does anyone know if software patents were declared null and void,
would this case still exist? It seems he only took snippets of code and not
the entire system for profit. How would this case differ if software was
copyrightable but not patentable (i.e. Either you stole the manuscript or you
didn't)?

~~~
wglb
Trade secrets are an entirely different category from patents. Patents require
you to disclose all the details.

Trade secrets, which is likely what such software is likely to be declared to
be, is, well, secret. As such, it has legal protection different than patents
or copyrights.

------
Volpe
Love the racial inclusion for no reason.

~~~
Volpe
That was sarcasm (btw). And I was pointing out the article was pointing out
the programmer was Russian for absolutely no reason. Why was it important for
us to know his nationality?

~~~
Grue3
I am Russian and I agree with this. Not all of us are prone to leak trade
secrets, honest!

