Proprietary code thieves sentenced in US

Former Société Générale trader Samarth Agrawal and former Goldman Sachs programmer Sergei Aleynikov have been sentenced

Two high-profile cases of proprietary code theft have been resolved after the defendants received their sentences in New York this month.

Former Société Générale (SG) trader Samarth Agrawal and former Goldman Sachs programmer Sergei Aleynikov have been sentenced to three and eight years’ jail time, respectively.

Agrawal was arrested by federal authorities in the US in April, before he was due to start his new job at Tower Research Capital. He is accused of having copied reams of proprietary SG code used for high-frequency trading into Microsoft Word documents before printing them for transportation.

The former trader was then caught on surveillance camera putting the hundreds of pages of code into a bag.

Agrawal was found guilty of code theft in November 2010. US district judge Jed Rakoff’s sentence to Agrawal is less than called for under federal guidelines, but Agrawal will also face two years of supervised release after leaving prison.

Meanwhile, Sergei Aleynikov, a former Goldman Sachs programmer, has been sentenced to eight years and one month for his theft of high-frequency code from the bank.

Aleynikov, who was declared guilty at the turn of the year, left Goldman in 2008 for Teza Technologies, taking with him code on the workings of the bank’s high-frequency trading algorithms. Aleynikov encrypted and transferred substantial portions of code, before deleting the software he used to encrypt them.

Prosecutors had Aleynikov returned to jail in March this year after concerns arose he might be a flight risk, in part due to his dual nationality.

The sentence is four times what was recommended by probation officials, but still remains at the low end of federal guidelines for his crimes.