Sergey Aleynikov

Portrait from Aleynikov's legal defense site.

Birthname	Sergey Aleynikov
Date of Birth	February 23, 1972
Birth Place	Soviet Union
Nationality	Russian, American
Occupation	Computer Programmer and Software Architect
Biography	Russian-American computer programmer accused of violating trade-secret protection laws.

Sergey Aleynikov is a Russian-American computer programmer who has been indicted for illegally appropriating code from Goldman Sachs, his former employer. While employed at Goldman Sachs in New York City between 2007 and 2009, he developed high-frequency trading (HFT) systems on behalf of the Direct Private Investing division. In mid-2009, he received and accepted an offer from a competing HFT firm, Teza Technologies. Before leaving his position at Goldman Sachshttp://www.rutgers.edu/, he created personal copies of source code from Goldman Sachs information technology infrastructure. He was subsequently convicted twice of crimes related to the downloading of code and is currently still engaged in a legal defense of his actions. His career in the HFT field inspired the book Flash Boys.

Early Life

Aleynikov was born to a Russian Jewish family of academics. Before attending the Moscow Institute of Transportation Engineering, he first used a computer at age sixteen and became fascinated by writing computer programs. He wished to study Computer Science during his undergraduate term, but was prevented from doing so by Soviet authorities on account of his semitism. He was only allowed to study mathematics.

Emigration to the U.S.

Before finishing his degree in Moscow, he became frustrated that he was not permitted to pursue his interest and concerned by the political climate in Moscow. He decided to emigrate to the United States shortly before the collapse of the Soviet Union and arrived in New York City in mid-1990. He would later become a naturalized U.S. citizen. He sought employment in New York City and eventually found a position as a programmer at a New Jersey Medical Imaging clinic. He soon moved to a position as a teacher's assistant in the Rutgers University computer science department where he completed first a Bachelor degree in computer science and then a Master of Science degree, both concurrent with his employment.

Professional Career

Early Career

Upon completing his Master's degree in 1996, he took a sequence of positions working as a software engineer for internet companies. In 1998, he took a role at a New Jersey-based telecommunications company, IDT Corporation. He spent nearly nine years working as a Director and Lead Engineer in IDT's Research and Development division, improving the logic used to route voice calls through telephone lines.

Transition to Wall Street

A recruiter for Wall Street financial firms contacted Aleynikov in 2006 in attempt to convince Aleynikov to apply for algorithmic stock trading positions. The recruiter believed Aleynikov was a good candidate because of Aleynikov's extensive experience working with low-latency systems like the IDT's voice call routing system which mirrored the technical challenges of algorithmic trading. Aleynikov was initially disinterested in the nature of the work, but agreed in 2007 to interview with Goldman Sachs when he became concerned about the state of IDT's management and needed additional income to fund the purchase of a larger home for his family. After completing several rounds of interviews, he accepted an offer for a position as a Vice-President of Equity Strategy in May, 2007.

Departure from Goldman Sachs

During his tenure at Goldman Sachs, he made several observations about the environment he worked in which he would later recount in Flash Boys. First, he was confused by his managers' stance on Open Source Software. He was encouraged to use code which had been published online in code he wrote for Goldman's trading systems, however when he asked for permission to publish his improvements to open source libraries, he was denied the opportunity. He perceived that his managers saw the improved code -- independent of the bank-specific code Aleynikov had added -- as property of the bank where he saw it as public property. Similarly, he saw the existing code the bank maintained to be, in his words, "an elephant." He felt that he was constantly fixing small problems on a huge project rather than creating new and original code. Finally, he noted that, “essentially there was very minimal connections between people," and that the bank provided an environment of isolation to its programmers.

Teza Technologies Offer

When he received an offer for a move to Teza Technologies, a Chicago-based hedge fund, in April of 2009, he was excited about the chance to build a trading platform from nothing. He accepted the offer which tripled his Goldman Sachs salary and handed in his resignation from his role at the bank, agreeing to remain in the office for six weeks to ease the transition of his replacements.

Alleged Crime

During the final six weeks of his time at Goldman Sachs, the FBI alleged that Aleynikov logged on to a Goldman computer system four times to duplicate parts of the bank's proprietary HFT codebase.

Per the testimony of Michael G. McSwain, the lead investigator in the FBI case which followed Aleynikov's departure from Goldman Sachs, Aleynikov sent these copies to himself via email and that, in his final several days of employment, once uploaded 32 megabytes of source code to online software version servers to make the code accessible after his departure from the bank. Aleynikov has stated that he meant to keep a copy of just small sections of open source code he had previously utilized for later reference and did not intend to copy any proprietary logic.

McSwain's deposition also alleged that Aleynikov deleted the command-line log files on his Goldman-provided computer after he transferred code to an external web server. Aleynikov admitted in a written confession that he both removed these records and knew that his employer "wouldn't be happy about it," but defends his actions by pointing out that he wished to protect his internet passwords which could be exposed by the log files. He stated that deleting the log files "felt like speeding. Speeding in the car."

Prosecution

Federal Case

He was ultimately acquitted formally on June 5, 2012 on two counts.