It appears his acquittal was based on a technicality (language within the Economic Espionage Act) and he has pretty much admitted that he did something wrong (uploaded it to a server in Germany to bypass Goldman's security):
At trial, Mr. Marino, the lawyer for Mr. Aleynikov,
acknowledge that his client breached Goldman’s
confidentiality agreements, but insisted that he did not
commit a crime.
So, it would seem that Goldman should rightly be rather upset about this, as much as I dislike Goldman, they seem to be in the right here?
I used to work at Goldman's and I can tell you that they will be absolutely furious about this. I have never worked at a company so paranoid about having work stolen. Once - a friend of mine sent me an email with a tag-line with a bit of code in it. When I replied the email filters picked it up and I had to explain to my boss why I was trying to "export" Goldman's code. They are nuts about it.
Goldman put a lot of time and energy into making an example out of this guy. He blatantly "did it" - they had recorded phone conversations of him talking to his new boss and uploading code immediately after. I know the details because we received almost weekly reports on the case via the corporate intranet (in the "news" section). Goldman wants their people scared so nobody else tries this.
I always found it a bit odd because the court sentenced this guy to 8 years. Ummm... ok. But why is Fabrice Tourre still walking around? Justice indeed.
Forget Fabrice Tourre, how about John Corzine? The government isn't even going to use the law _that he created_ to go after him for stealing client money.
What bothers me more about this particular case is that Goldman's attorneys claimed that this code could be used to manipulate the market, and yet the SEC did nothing to investigate.
You have documented court testimony of a market participant (Goldman) claiming they have the ability to manipulate the market. This should be a slam dunk if we had regulators with anything remotely resembling balls.
You misunderstand, knowing how someone else is going to trade allows you to do market manipulation, knowinf how you are going to trade yourself obviously doesn't help you do market manipulation
You can use a hammer to kill someone quite easily.
Let's imagine that I go to the police complaining that a bunch of my tools, including a hammer, was stolen from my truck. Should I be prosecuted for murder? Is this a "slam dunk", and should the police and prosecutors have their manhood questioned for not going after me for murder? Even though, to the best of everyone's knowledge, no murder has been committed by anyone, least of all me?
Pretty much anyone, including you, has the ability to manipulate the market. It's not hard; in fact it's so trivial that you can do it by accident. That doesn't mean we should throw you in jail just in case you decide to do it in the future.
is the culture there as back-stabbing and ruthless as it seems like to outsiders? Or is it just an exaggeration and people are mostly nice and pleasant, albeit ambitious?
Probably both. I have a couple friends there and they're some of the smartest, most decent human beings I know. On the other hand you get stories like this, and the Fabrice Tourre's and whatnot. Grey, not black or white.
It's fair that they're upset, 8 years in prison seems overly harsh though. In fact, any time in prison seems a bit over the top for what is essentially a breach of contract and therefore a civil matter between Goldman and the ex-employee.
The issue in this case wasnt over whether Aleynikov did something wrong (he even admitted as much). The issue is over how he should be punished. Goldman should be upset, but that doesnt necessarily mean he deserves the degree of punishment that the Economic Espionage Act entails.
Eh, no, that's not what the issue is about. The article states explicitly that no reason for the reversal was given (yet), but it seems to be about the extent of 'interstate commerce'. I.e., a purely technical legal point, having nothing to do with the material matters in the case.
But they are related. If the conviction was upheld, he could be punished criminally with jail time. With the conviction overturned, Goldman can still go after him civilly for breach of contract which is relatively similar to a fine.
"Relatively similar"? No it's not. Criminal conviction or not, GS could still sue, albeit that the proof would be easier. Either way, I don't understand the relationship between your post and mine, or the whole point that is being made here.
Punitive damages maybe, plus maybe contractual obligations on damages in case of breach. If they didn't use it, and if a civil case was purely based on damage caused (two big ifs), I don't think there would be much of a (civil) case, no, because there needs to be causality between the breach and the damages, which then there wouldn't be.
It's not a technicality, they charged him under an inappropriate statute. If you punch someone and get charged with murder then you'll be acquitted since you did not commit the alleged crime of murder. It's not a technicality but incompetence on the part of the prosecutor.
There probably is a statute that is appropriate for this but didn't carry enough time to satisfy the prosecutor. Prosecutors often inflate charges so people will deal down to a lesser charge.
To me it sounds like he's admitted to a tort which GS could have resolved on its own with out using public resources.
I think this is a case where the right thing happened for the wrong reason. I don't doubt that the defendant wronged Goldman Sachs. But it's clearly absurd that he should have to spend 8 years in federal prison for it.
