Another story of a big corporation using the courts to screw over an individual. I have no doubt he was trying to steal from the company, but he was caught, convicted and went to jail, what more do they want? For him to spend the rest of his life in jail for being as greedy and unethical as his former employer? The hypocrisy is incredible.
Also, it's amazing how fast the wheels of justice move when a large financial company has been wronged, no?
Reading through the article, they seem to geoeuve they are entitled to own people at a pretty basic level. Their argument basically comes down to 'we paid you now you can never use that knowledge anywhere else.' it's not physical ownership it's cognitive ownership and frankly the courts seem I'll preppared to make such a differentiation.
To add...the deference in courts and the public is generally towards assertions by powerful people as truth. Even when we know they have no basis, the deference remains and frames inferences and interpretation.
Example:
>But they knew, from the tight security in the office and the imposing nondisclosure agreements they were asked to sign, that their work was extremely valuable
It must be valuable because it's secured. I'm not saying it's not, but assuming it is simply because a corporation that acts in this way tries to secure it is nonsense. It's allowing them to author a narrative simply because you assume they act in good faith.
I nearly went to interview with G-Research when I moved near London and was looking for jobs a couple of years ago. I hadn't been that interested in algorithmic trading, but when a rectuitment agent mentioned a 120K starting salary it perked my interest. That might not sound like much to Valley types but for a first tech job in London it's mental.
They sent me one of those online automated coding tests; I prepared for several days, which turned out to be unnecessary as the test was quite straightforward. I completed both questions in the "choose one of the following" section, and an SQL question despite never having used SQL. I think the test was just there to filter out chaff, but they were very keen to get me in for an interview.
I talked it over with my wife, who was also quite stunned by the salary but pointed out that I'd literally just be moving money around to make rich people richer. I actually also talked it over with the boss of a smaller company that had already made me an offer. His advice, which turned out to be very wise, was to research them very thoroughly as a lot of city firms like this will offer big bucks but will suck the soul out of you.
I then spoke about it with a friend who mentioned that one of his friends worked there. This is when I discovered their paranoid security practices, such as handing in your mobile phone as soon as you enter the building. That was the final straw in my head... no doubt they had their reasons but a culture of paranoia was not what I wanted at all.
Going back to how keen they were to get the interview, I remember telling the recruitment agent that I wasn't that interested and that I was going on holiday shortly which would cut down on opportunities to "just go in and see what it's like anyway". At this point he said I could literally name any time of night or day to go to their office, or I could speak on the phone with one of their guys who was currently in Spain for some reason. It started coming across as weirdly desperate.
I ended up going with the offer from the smaller company and have been very happy. I read about the case of Ke Xu not long afterwards and affirmed my conviction that I'd made the right choice.
I interviewed with G-Research a while ago, and this was pretty much my experience too.
Everyone i met there - interviewers, other developers on the team, bosses - seemed great: really smart and absolutely lovely. I'm sure i would have enjoyed working with them. They did some aggressive pursuing after the interview. But ultimately, the environment was just too weird and paranoid for me. A real shame.
Sadly, even though this particular person made the moral choice, for each 1 person of his fibre there are 10 just willing to take up the dirty work. Notwithstanding the noble actions of some people, the system is still broken if it richly rewards this kind of destructive behaviour; and make no mistake, as long as it does reward those things then those things will be done.
I've got to say, I've got a lot less sympathy for Xu than most people in this thread seem to have. Firstly, what he did was absolutely unacceptable, he didn't just copy stuff, he went out of his way to break security procedures at the company he worked at to steal other people's hard work. He then literally fled the country knowing exactly what he was doing. He trafficked in stolen goods handing the IP to his family in China where he knew that the company would never get it back. He got his family to lie in court about the entire thing. He still wont admit what he stole and we all know that the second he goes free he can travel to China and sell the stolen IP. Unfortunately for Xu, because his family lied in court about destroying the IP and because he is from China where we all know any chance of enforcing any contracts is nil, any return to China is basically a sign off allowing him to profit from his stolen IP. So again, I perfectly understand why G-Research wants to stop him, every extra month in prison is another month where he can't hand over their IP to competitors.
I'm sorry but that is a whole head of red flags. Meanwhile, people seem to have a problem with G-Research in what they did to track him down. They tried to stop him travelling - seems pretty reasonable since he fled the country. They tried to stop him leaving HK - seems pretty reasonable since he tried to leave and succeeded in smuggling IP worth millions into mainland china. They hired PIs to watch his family - seems pretty reasonable since they actually DID participate in the crime and lie about it!
I feel sorry for the guy but this really does seem like an example of someone doing pretty much the worst thing they can do in a situation and doing it to the most powerful person they could.
G-Research's actions prior to Xu's initial conviction could be considered reasonable.
However their later actions to continue to push for additional jail time and to harass UK government entities when they didn't get the desired response seem less reasonable.
It seems like they're using the UK criminal justice system to attempt to scare people, which is not its intended function.
Scaring people is one of the main functions of a justice system. The whole reason police go for big newsmaking busts is that it's more effective at scaring people.
I agree that his actions would end up in lawsuits anywhere in modern world, and I understand the attempt of former employers to block him as much as legally possible. Kudos to employer for not simply hiring a hitman.
That said - who in all honesty will root for some paranoid vengeful billionaire? I couldn't care less if he loses some 30 millions in his multi-billion empire. Which, according to the article, shouldn't be the case - strategies expired, the secret isn't worth anything anymore, and this is just bullying and revenge, because he can and his ego got hurt. With almost 100% guarantee he is 'optimizing' everything to Guernsey he can tax-wise, so British citizens don't see anything from his vast income.
Not much sympathy for some little man with big ego and even bigger wallet.
Well let's be clear about the stakes of this. Firstly, the billionaire isn't going to lose anything - he owns a company with dozens of different strategies. The people who will lose out are the other engineers who designed and built those strategies and now can't use them anymore. Even the risk of those stategies being out in the wild opens them up to the risk of a competitor exploiting their expected behaviour, so lot's of their work is going to have to be re-engineered. Secondly, whilst $30m doesn't threaten the company, having former employees thinking they can walk off with the secret sauce does threaten the existence of the company. So it's not surprising the most famous example of this is the one that's going to get the strongest enforcement.
There is standard codified punishment for what you describe - it isn't anything special to quant trading, we can talk about secret sauce of many IT companies, or companies in general. Some dev walks out of Google with their Search code/data would be much more scary and damaging.
What we see here is punishment for the sake of punishment, from person who is clearly amoral according to anything you can find on him online (quite a bit). All I say is I have no sympathy for him and the case, which btw even the company itself originally claimed would expire in +-August 2018. Yet they still go for revenge. That's pathetic and clear abuse of legal system from my viewpoint.
Here's the thing though: Even knowing the whole story, that a jerk billionaire is flexing his full legal force on Xu to make his life as hellacious as possible, doesn't change that Xu is a complete shitbird.
Xu did a bad thing. End. It doesn't matter who he did the bad thing, we can all agree that it's a bad thing to lie cheat and steal for personal financial gain. The other player in the story doesn't make it acceptable. But people want to shift the narrative to "but what about how bad G-Research is" and that's just the consequence of the first bad action.
"The year before, a group of five programmers and managers had left ... to start their own trading outfit. The company ... argued that the five had developed their quant-trading skills at the company, and so any new platform would have to be similar and an infringement of its intellectual property."
interesting, especially when combined with how happy such companies say they are to hire STEM graduates with zero Finance knowledge. is that what one has to expect when entering such an industry?
Can we stop using the term ‘math prodigy’ for someone who was essentially a quant monkey - that too at best a decent one?
He ain’t no Ramanujan, or a Terrence Tao or any of the recent Fields’ medalists who have poured their heart and soul into their craft with no expected financial return.
probably explains his naivety in agreeing to extradition from hong kong instead of skipping to china...unless they figured out a way to pressure him into returning
I don't know man, my mom has called me a "computer genius" since I was 15. I'd imagine getting a PhD in math is equivalent is the same idea to business journalists, but 'prodigy' level and working in private industry with a bunch of MBAs instead of pushing out papers in academia.
> Can we stop using the term ‘math prodigy’ for someone who was essentially a quant monkey - that too at best a decent one?
The guy was a math prodigy though. What else would you call one of the top math students at cambridge?
> He ain’t no Ramanujan, or a Terrence Tao or any of the recent Fields’ medalists who have poured their heart and soul into their craft with no expected financial return.
You don't have to win the Fields' medal or achieve greatness to be a prodigy. There are plenty of prodigies who fail to live up to their potential or simply choose to do other things.
It's not just in academics. There are sports prodigies who, for a variety of reasons, fail to achieve greatness.
Take baseball. For every ken griffey jr, there are a bunch of brien taylors. For every lebron, you have a greg oden or kwame brown.
>> What else would you call one of the top math students at cambridge?
I would call him a good, hardworking student. (At least that's what we'd call it in Singapore ;) Coincidentally me and Xu went to high school at the same time in Singapore)
If we labelled everyone who did well in the undergraduate curriculum as prodigal - the word itself starts loses its meaning.
Let's take the top 20 universities across the world (harvards,mits, tsinghuas, iits etc.) and take the top 10 graduating students from each class (math, physics, etc.) => are we saying that the world is producing 500-1000 prodigies every year?
> I would call him a good, hardworking student. (At least that's what we'd call it in Singapore ;)
How many singaporeans are top math students at cambridge? If hard work is all that it took, we'd all be studying math at cambridge.
> Coincidentally me and Xu went to high school at the same time in Singapore)
"Coincidentally Xu and I..."
> Let's take the top 20 universities across the world (harvards,mits, tsinghuas, iits etc.) and take the top 10 graduating students from each class (math, physics, etc.) => are we saying that the world is producing 500-1000 prodigies every year?
I'd say there are far more prodigies than that being produced every year. You do realize that there are 7 billion people on earth right?
You don't have to be newton or einstein to be a prodigy. Most prodigies never live up to their expectations. Maybe you use the word differently in singapore than in the US.
Whilst it seems apparent from this story that Xu was attempting to steal information from his employer, to me the bigger story is how much access to the justice system in the UK is predicated on wealth.
Not in the use of Allen & Overy, they're a private law firm, anyone who's got the cash can pay them.
The ability to get the quantity of police resource use detailed in this case assigned to a white-collar crime, would seem amazing to UK citizens who would struggle to get that kind of response to likely more serious crimes.
I def feel for the guy and how he basically got years of his life ruined by a big player, but him and his family did some pretty shady stuff with regards to the company computers and data.
> There was a problem, though, beyond the physical security protocols at the G-Research office: The company scrambled the code that ran its trades, specifically to prevent it from being copied. So Xu built a decompiler that could translate it.
He admitted writing code to de-obfuscate the work of his coworkers and copying it. He gave several electronic devices including computers to his parents as he was being hunted by authorities. He made up ridiculous stories about how the devices were destroyed (ex: one was cremated with his relative) and his parents were caught in court lying about throwing the computers in a river when the company has them under surveillance 24x7.
Nobody likes being lied to repeatedly, especially courts.
You still need to exit HK first, right - it's the same immigration department/check as at the airport. (And the West Kowloon railway station with mainland border checks inside HK did not exist back in 2014 in that form.)
He could just walk past to Shenzhen, but I'm not sure that would much different in this case.
If he realy want to and have money, pay to be smuggled through Vietnam, or Laos is fairly easy, locals there charge like 50 rmb to motorcycle you through the border jungle.
Or maybe pledge allegience to the party on TV shows like some Chinese with criminal records overseas, for example this guy went on Chinese TV to recount how he as an innocent patriotic citizen was persecuted by the vicious American.
Sorry, I'm confused, and I must admit that I haven't tried getting into China illegally (from Hong Kong or anywhere else for that matter), so I might be missing something.
I understand that HK and China share a land border. But AFAIK that is not a border you can just walk over - there's a river and a fence and guards and all. You can cross the border at designated border crossings, by foot or train, but you will have to go through HK immigration to leave HK and then mainland immigration to enter China.
To go from HK to Vietnam or Laos, you'd have to take a plane from HK, in which case you also have to go through HK immigration to leave HK.
It remains my impression that HK immigration, which one has to go through when departing HK (at the airport or the land border or the train to China or, before someone mentions that, the ferries to mainland or Macau), did not let him leave HK.
(As for pledging allegiance, again, the problem for that particular Chinese citizen was not entering China, the problem was leaving HK.)
Thus, I remain puzzled by the suggestion that he "just walk past to Shenzhen" or "get on a train". Swim over, sure, but walk or take a train?
It's a program (or function, or object, etc) where you feed in events for changes in market data and perhaps other things, and it feeds out commands to buy and sell particular quantities of particular instruments at particular prices.
AIUI, that program is typically quite simple in structure: it might work out target prices for some set of instruments based on prices for another set of instruments, with a function that is not necessarily more complicated than a polynomial. Then it buys or sells if the market price is sufficiently different to the target price.
The structure of the pricing function will be designed by a quant, and the coefficients in it will be set by fitting to historical data. A lot of the work goes into developing tools and practices for doing that fitting, backtesting the fitting, etc.
I don't understand the logic behind the 3rd jeopardy. Was it that he didn't show remorse? So the lawyer accused Xu made a mockery of the court and the Judge just went with it?
While reading the 3rd part, I kept thinking "brexit logic" which I have come to associate with British thinking that seems too idealistic to be actually implementable. And yet apparently the entire British judicial system allows it.
Interesting that the trading strategies have a shelf life, and they're basically trying to keep him in court / jail until they deem those strategies no longer valuable.
Presumably they're not investigating de Putron because it is clear what the source of his donations is (he has a lot of money and owns a profitable quant trading firm).
>At around that time, de Putron got involved in another legal dispute that foreshadowed his companies’ campaign against Xu. The year before, a group of five programmers and managers had left G-Research, then known as GR Software & Research Ltd., to start their own trading outfit. The company responded by first threatening a lawsuit, then, in 2011, by filing one. None of the filings suggested anything had been stolen, but G-Research argued that the five had developed their quant-trading skills at the company, and so any new platform would have to be similar and an infringement of its intellectual property.
Intellectual property contracts are common in finance. I had a clause that, if enforced, would have prevented me to work for two years in the industry, while offering half my usual salary in the meantime. I think it's fair (doesn't hold you off forever and also doesn't starve you while you're out of the game). In my case, it wasn't enforced when I left (which is more bad news for me than good, since it just means I wasn't valuable enough :)
The article says they even sued former employees (that were not accused of stealing) for simply having the audacity to start a company in the same field.
If his attempt was to disappear with something really valuable, he would've left for Beijing without leaving a note, and let their lawyers having fun persuading Air China to detain him on arrival.
It amazes me that in this day and time, some naive rich people genuinely believe of some piece of code can simply magically make money out of thin air (while some look to do so, what they do is a banal spread trading without realising it.) Quants people... they have that habit of puffing an air of mystique around themselves, but when you read their technobabble you can't hold yourself from laughing.
I met a number of such, all claiming some bizarre "supersophisticated" strategy, but even with a level of math availing me, a half baked engineer wannabe, I can't not to notice their math being junk, to the point of it having banal arithmetic errors. Sometimes, they resemble me the crazy guys who are trying to invent perpetuum mobiles - people in that cult-like subculure are not dumb for sure, engineers and mathematicians, but all having trouble with thermodynamics, all thinking that it must me them to find a hack for the first law.
How much of quant thing is RNG, and how much is just a cover for insider trading, think yourself. A man like PdP, may have much more reasons to go after Xu just for suspicion of him getting an idea of how his business was actually making money https://offshoreleaks.icij.org/nodes/12016846
Writing off an entire field with easily understandable principles seems absurd.
Much of the quant field is very straightforward mathematical modeling. Every field has bad research, but writing off CS as a field because some researchers have created a zombie out of stackoverflow code should also strike you as wrong.
Xu's actions through out the article were quiet self serving, and selfish, no? G-Research is what it is, the behavior he exhibited while quitting and before that, going through sensitive code at the Company is not an innocent mistake.
You have to understand that a company like G-Research could easily be put out of business (or made to suffer severely) if their IP is stolen/disclosed - and Xu's refusal to cooperate with authorities is Xu's own undoing, not G-Research's.
Also, it's amazing how fast the wheels of justice move when a large financial company has been wronged, no?