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Goldman Sachs May Lose Millions From Ex-Worker’s Code Theft

2 points by nathanwdavis 17y ago

Tangurena 17y ago
I find it interesting that they had the political pull to get the FBI to arrest the accused in 1 month after filing the complaint. With computer crime and IP theft, it usually takes about 12-18 months before the FBI gets moving to arrest folks. UBS had 3 folks quit back in March, also allegedly taking about 25k lines of code with them, and while UBS filed a lawsuit a week later, neither of the 3 have been arrested at all. http://www.businessinsider.com/ubs-accuses-three-quant-traders-of-stealing-its-secret-code-2009-6 http://www.businessinsider.com/ubs-accuses-three-quant-trade...
nathanwdavis 17y ago
I don't believe the prosecutor that this represents a U.S. national security risk. It takes a lot more than a trading algorithm to throw off markets. It takes a lot of money, and U.S. traders with a lot of money are already doing this. It's called arbitrage. This is definitely an IP loss for Goldman, but it is not as big of a deal as they are making it out to be. Chances are the U.S. Attorney's office has access to Goldman's pockets.
brown9-2 17y ago
Sadly it sounds as if the US Attorney doesn't really understand much about how either the software system worked, or how trading in general works: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday. “The copy in Germany is still out there, and we at this time do not know who else has access to it.” ... “Once it is out there, anybody will be able to use this, and their market share will be adversely affected,” he said. It's not as if the software alone allows someone to make trades up to 28% of the size of the overall market. Maybe if you had their code, infrastructure, co-location, and oh yeah that's right, tens of billions of dollars to make trades with. It's not as if a script kid in Germany is suddenly going to be able to download the trading code for free, and become a multi-millionaire overnight using their trading algorithms without any seed investment.

2 points by nathanwdavis 17y ago

I find it interesting that they had the political pull to get the FBI to arrest the accused in 1 month after filing the complaint. With computer crime and IP theft, it usually takes about 12-18 months before the FBI gets moving to arrest folks. UBS had 3 folks quit back in March, also allegedly taking about 25k lines of code with them, and while UBS filed a lawsuit a week later, neither of the 3 have been arrested at all. http://www.businessinsider.com/ubs-accuses-three-quant-traders-of-stealing-its-secret-code-2009-6 http://www.businessinsider.com/ubs-accuses-three-quant-trade...

nathanwdavis 17y ago

I don't believe the prosecutor that this represents a U.S. national security risk. It takes a lot more than a trading algorithm to throw off markets. It takes a lot of money, and U.S. traders with a lot of money are already doing this. It's called arbitrage. This is definitely an IP loss for Goldman, but it is not as big of a deal as they are making it out to be. Chances are the U.S. Attorney's office has access to Goldman's pockets.

brown9-2 17y ago

Sadly it sounds as if the US Attorney doesn't really understand much about how either the software system worked, or how trading in general works: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday. “The copy in Germany is still out there, and we at this time do not know who else has access to it.” ... “Once it is out there, anybody will be able to use this, and their market share will be adversely affected,” he said. It's not as if the software alone allows someone to make trades up to 28% of the size of the overall market. Maybe if you had their code, infrastructure, co-location, and oh yeah that's right, tens of billions of dollars to make trades with. It's not as if a script kid in Germany is suddenly going to be able to download the trading code for free, and become a multi-millionaire overnight using their trading algorithms without any seed investment.