6 ms·

Sergey Aleynikov Loses in Goldman Fight Over Fees

105 points by RenierZA 12y ago

spindritf 12y ago
They're all vice presidents there? American Psycho is becoming truer every day. the ruling gives Goldman an incentive to keep the ambiguous language in place so it can reserve the right to make “unpredictable post hoc determinations about which former employees should be advanced attorney’s fees and which shouldn’t,” Fuentes wrote. Maybe there's some selection bias going, or I'm a contrarian, but somehow dissents usually make more sense than rulings.
- tlrobinson 12y ago
  Yeah, GS has something like 12,000 "Vice Presidents", or ~40% of their employees. https://www.quora.com/How-come-Goldman-Sachs-has-12-000-VPs https://www.quora.com/How-come-Goldman-Sachs-has-12-000-VPs
- dmitri1981 12y ago
  Vice President is a mid ranking title in an investment bank for anyone with about 5 to 6 years experience.
  - ianstallings 12y ago
    I think the term pomp and circumstance is completely appropriate in this case.
- jmsdnns 12y ago
  That's how Bear Stearns was when I was there, 26, and a VP. The title is pegged to the salary, not responsibilities.
  - ianstallings 12y ago
    Serious question, does that make your job search harder when you leave to a place that doesn't hand out VP titles? People seem to be very particular about titles. Edit: Why did someone down vote me for asking a question? Don't be so goddam sensitive.
    - deleted 12y ago
      [deleted]
    - bushido 12y ago
      > does that make your job search harder when you leave to a place that doesn't hand out VP titles? Doesn't make the job search harder within the financial industry. In my experience the majority people are recruited/courted extensively for positions in the industry, hence it's not quite a "job search" in the majority of the cases. On the other hand, if they could choose other titles, on the lines of "lead guitar" they may have trouble with job search. People generally seem to be very particular about industry-based titles.
      - ianstallings 12y ago
        I agree, with such a stupid title as "lead guitar" people would never know how important I am and they might not court me. Which I am dying to do. I hope to have one day a whole wall filled with titles, certificates, and bonafides that I can point to and say "look at all those pieces of paper". Because writing software, well that's just a distraction from my real job - getting important titles..
    - kasey_junk 12y ago
      This doesn't come up much for me as I tend to come into places via reccomendation, but when I do deal with it, I just craft my resume to the expectations of the prospective job.
    - kevinskii 12y ago
      I downvoted your question because it contributes nothing to the discussion at hand and is unlikely to lead to any interesting side topic. That's all. Don't be so goddamn sensitive.
- loumf 12y ago
  Someone once told me (but, I don't know if it's true) that you need the VP title to be able to sign off on trades, which is essentially a contract. That started a culture of proliferating the VP title.
- jrockway 12y ago
  Standard investment bank titles. At BofA, where I worked, the progression was Officer -> Assistant VP -> VP -> Director -> Managing Director. In the software world, this is something like SWE II, SWE III, Senior SWE, Staff SWE, Senior Staff SWE. The titles in the software world don't make much sense either.
  - Cookingboy 12y ago
    You don't happen to work for Google do you? ;)
  - ianstallings 12y ago
    Man somedays I am just so happy to work for startups. I get to choose my own title. My last one was lead guitar, but it ended up confusing people so I changed it to just "lead". My current one is "software guy". Edit: Oh sorry, I didn't know this was a serious topic, for serious discussion only. I'll just take my awesome title and go live it up, doing what the fuck I want. Have fun filling out your TPS reports.
    - legohead 12y ago
      This isn't reddit. HN is serious business.
      - ianstallings 12y ago
        The funny thing is I was being serious. I guess people just didn't like what I said. So then I turned it up a notch with the edit. Because, well, I am who I am.
        vinceguidry 12y ago
        I'm pretty sure legohead was being facetious.
    - jtfairbank 12y ago
      I was thinking of assigning everyone a fun title, and specific responsibilities to go along with it. For example, a staff member who worked as a barista in a former life could be the "Caffeine Queen" and make delicious caffeinated drinks for our team (only if she wanted to and time permitted, of course). Or I would be Senior VP of silly hats, and ensure everyone has access to a hat incase they needed to change their identity in a hurry.
- mcpherrinm 12y ago
  American Psycho's use of VP was a reflection of the existing banking culture: It is not becoming truer; it already was.
- mbesto 12y ago
  There is a proliferation of VPs in financial institutions because it makes their clients feel like they are dealing with someone senior. Serious.
rayiner 12y ago
The Delaware law provisions in question exist because the officers and directors of a corporation are often sued for the alleged misconduct of the corporation itself, and it's reasonable in those circumstances for the corporation to pay for their defense. A VP at Goldman is, I think, the third lowest ranking front-office position. Not only is it not the sort of "officer" that Delaware law contemplates, but it's also not the sort of context Delaware law contemplates. Aleynikov wasn't accused of wrongdoing in his official capacity as an officer of the corporation. That might be something like a CEO being accused of funneling contracts to his brother's company. Aleynikov was accused of wrongdoing that was incidental to his employment.
- deciplex 12y ago
  >A VP at Goldman is, I think, the third lowest ranking front-office position. So what? Let's just stick with the letter of the law, otherwise we're just choosing the letter or the spirit, whichever is more advantageous for the higher-status party. I have no doubt that, had he lost on a technicality rather than this bullshit, the inverse of your post would be the top comment instead (though I'm pretty sure it wouldn't have the same author, I hope).
  - jamesaguilar 12y ago
    The letter of the law does not impinge on this question, since there is no law mapping bank employee designations to legally-defined officers of a bank.
    - deciplex 12y ago
      Here's the law in question, for the record: >Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) . . . may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. You'll notice that, unlike the article above (and a few other sources), there is nothing here about 'other employees' or agents of the company or whatever else. It is strictly officers and directors. But, I'm surprised it's ambiguous that he's an officer. I don't work for Goldman, but I do work for a similarly large corporation in the same industry, and I can tell you there is no question that I'm an officer, at least according to the company bylaws, where I have to follow even the rules laid out specifically for officers. I assume it was the same for him, since he's in a similar position to myself (actually, a bit higher up, even). Perhaps the bylaws at Goldman are just weirdly ambiguous and open to interpretation. Knowing what I know of management culture at Goldman Sachs, it would not surprise me in the slightest to learn they chose to keep them this way. However, if they are wording their bylaws in such a way, I see no reason for the court to give them the benefit of doubt in determining whether he's an officer. I mean, taken at face value, all you're saying is that a company never has to follow this law, since they can always claim someone isn't an officer or director.
code_monkey_vp 12y ago
VP is common across the 'Murican banks. I am one, albeit in a different continent. VPs don't need to manage a team, but they do often shoulder some responsibility for a project, or maybe, even run the project. Usually, it is the level of pay that bumps them into the VP bracket. Not much else.
- wclax04 12y ago
  And American VPs are Executive Directors in the UK
Tosh108 12y ago
Why are legal costs so ridiculously high in the states?
- rayiner 12y ago
  Because we have many rich people and corporations willing to spend a lot of money to make sure they don't lose their cases. According to Wikipedia, Aleynikov was making over $1m per year at a Goldman competitor after he left. And it looks like he got his money's worth. There was no dispute that he took the code. His "open source" defense apparently fell through, and a jury convicted him. He only won on appeal because he convinced the Second Circuit that software wasn't a trade secret within the Electronic Espionage Act, something which Congress went and explicitly my added in response to the court case.
  - foobarqux 12y ago
    I don't think Aleynikov started his job at his subsequent employer, they rescinded his offer after the Goldman allegations.
    - deleted 12y ago
      [deleted]
  - sanderjd 12y ago
    So then your parent's question degenerates to, why does spending more money correlate with winning more cases? Which is a much more interesting question.
    - dredmorbius 12y ago
      Three pathways. 1. Money is a means of resource allocation. More money, more resources. 2. War of attrition. Raising costs on the other guy makes settling or coming to some sort of settlement more likely. 3. Scorched earth. GS may be trying to send a message not so much to Alyenkov as to any other programmers who'd be willing to entertain a similar stunt. See recent coverage of Amazon's frequent, but nearly entirely unsuccessful, pursuit of noncompetes against former employees. In particular, bcantrill's comment: https://news.ycombinator.com/item?id=7975428 https://news.ycombinator.com/item?id=7975428 the fact that we had prevailed against Amazon also gave these engineers the confidence that we could and would do so again -- and ultimately, it didn't prevent anyone from matriculating. It did, however, have one lasting effect: the engineer that was pursued went from thinking fondly of his years at AWS to hating AWS and Amazon with a white-hot passion that still burns today. In the end, enforcing a non-compete is like erecting a Berlin Wall: if you feel you need it, you have much deeper problems...
ianstallings 12y ago
Goddam the links on that article are annoying. None of them are sources, just links to general "topics" under bloomberg. Completely confusing. Read this instead: http://en.wikipedia.org/wiki/Sergey_Aleynikov http://en.wikipedia.org/wiki/Sergey_Aleynikov That being said, this just shows how much power Goldman wields with the establishment and it was kind of a scary insight into their recorded weirdness. Basically they just said to the FBI that he stole the source code and he could possibly use the code to manipulate markets. This is a guy that writes the code to manipulate markets, but then he was a criminal, because he might do it for himself. The whole thing is insane IMHO.
- newaccountfool 12y ago
  One of the charges sounds completely ridiculous. "unlawful use of secret scientific material"
- rhizome 12y ago
  Goddam the links on that article are annoying. None of them are sources, just links to general "topics" under bloomberg. Completely confusing. It's ILA: Internal Link Architecture. It was the hot thing several years back. http://www.seobook.com/archives/002332.shtml http://www.seobook.com/archives/002332.shtml
deleted 12y ago
[deleted]
davidw 12y ago
I hope everything ends up well for him. I've been a very appreciative user, and occasional committer to erlexec: https://github.com/saleyn/erlexec https://github.com/saleyn/erlexec It was kind of a shock when I put 2 and 2 together and realized who the author was, as I'd already been using the code for a while.

105 points by RenierZA 12y ago

They're all vice presidents there? American Psycho is becoming truer every day. the ruling gives Goldman an incentive to keep the ambiguous language in place so it can reserve the right to make “unpredictable post hoc determinations about which former employees should be advanced attorney’s fees and which shouldn’t,” Fuentes wrote. Maybe there's some selection bias going, or I'm a contrarian, but somehow dissents usually make more sense than rulings.

tlrobinson 12y ago
Yeah, GS has something like 12,000 "Vice Presidents", or ~40% of their employees. https://www.quora.com/How-come-Goldman-Sachs-has-12-000-VPs https://www.quora.com/How-come-Goldman-Sachs-has-12-000-VPs
dmitri1981 12y ago
Vice President is a mid ranking title in an investment bank for anyone with about 5 to 6 years experience.
- ianstallings 12y ago
  I think the term pomp and circumstance is completely appropriate in this case.
jmsdnns 12y ago
That's how Bear Stearns was when I was there, 26, and a VP. The title is pegged to the salary, not responsibilities.
- ianstallings 12y ago
  Serious question, does that make your job search harder when you leave to a place that doesn't hand out VP titles? People seem to be very particular about titles. Edit: Why did someone down vote me for asking a question? Don't be so goddam sensitive.
  - deleted 12y ago
    [deleted]
  - bushido 12y ago
    > does that make your job search harder when you leave to a place that doesn't hand out VP titles? Doesn't make the job search harder within the financial industry. In my experience the majority people are recruited/courted extensively for positions in the industry, hence it's not quite a "job search" in the majority of the cases. On the other hand, if they could choose other titles, on the lines of "lead guitar" they may have trouble with job search. People generally seem to be very particular about industry-based titles.
    - ianstallings 12y ago
      I agree, with such a stupid title as "lead guitar" people would never know how important I am and they might not court me. Which I am dying to do. I hope to have one day a whole wall filled with titles, certificates, and bonafides that I can point to and say "look at all those pieces of paper". Because writing software, well that's just a distraction from my real job - getting important titles..
  - kasey_junk 12y ago
    This doesn't come up much for me as I tend to come into places via reccomendation, but when I do deal with it, I just craft my resume to the expectations of the prospective job.
  - kevinskii 12y ago
    I downvoted your question because it contributes nothing to the discussion at hand and is unlikely to lead to any interesting side topic. That's all. Don't be so goddamn sensitive.
loumf 12y ago
Someone once told me (but, I don't know if it's true) that you need the VP title to be able to sign off on trades, which is essentially a contract. That started a culture of proliferating the VP title.
jrockway 12y ago
Standard investment bank titles. At BofA, where I worked, the progression was Officer -> Assistant VP -> VP -> Director -> Managing Director. In the software world, this is something like SWE II, SWE III, Senior SWE, Staff SWE, Senior Staff SWE. The titles in the software world don't make much sense either.
- Cookingboy 12y ago
  You don't happen to work for Google do you? ;)
- ianstallings 12y ago
  Man somedays I am just so happy to work for startups. I get to choose my own title. My last one was lead guitar, but it ended up confusing people so I changed it to just "lead". My current one is "software guy". Edit: Oh sorry, I didn't know this was a serious topic, for serious discussion only. I'll just take my awesome title and go live it up, doing what the fuck I want. Have fun filling out your TPS reports.
  - legohead 12y ago
    This isn't reddit. HN is serious business.
    - ianstallings 12y ago
      The funny thing is I was being serious. I guess people just didn't like what I said. So then I turned it up a notch with the edit. Because, well, I am who I am.
      - vinceguidry 12y ago
        I'm pretty sure legohead was being facetious.
  - jtfairbank 12y ago
    I was thinking of assigning everyone a fun title, and specific responsibilities to go along with it. For example, a staff member who worked as a barista in a former life could be the "Caffeine Queen" and make delicious caffeinated drinks for our team (only if she wanted to and time permitted, of course). Or I would be Senior VP of silly hats, and ensure everyone has access to a hat incase they needed to change their identity in a hurry.
mcpherrinm 12y ago
American Psycho's use of VP was a reflection of the existing banking culture: It is not becoming truer; it already was.
mbesto 12y ago
There is a proliferation of VPs in financial institutions because it makes their clients feel like they are dealing with someone senior. Serious.

rayiner 12y ago

The Delaware law provisions in question exist because the officers and directors of a corporation are often sued for the alleged misconduct of the corporation itself, and it's reasonable in those circumstances for the corporation to pay for their defense. A VP at Goldman is, I think, the third lowest ranking front-office position. Not only is it not the sort of "officer" that Delaware law contemplates, but it's also not the sort of context Delaware law contemplates. Aleynikov wasn't accused of wrongdoing in his official capacity as an officer of the corporation. That might be something like a CEO being accused of funneling contracts to his brother's company. Aleynikov was accused of wrongdoing that was incidental to his employment.

deciplex 12y ago
>A VP at Goldman is, I think, the third lowest ranking front-office position. So what? Let's just stick with the letter of the law, otherwise we're just choosing the letter or the spirit, whichever is more advantageous for the higher-status party. I have no doubt that, had he lost on a technicality rather than this bullshit, the inverse of your post would be the top comment instead (though I'm pretty sure it wouldn't have the same author, I hope).
- jamesaguilar 12y ago
  The letter of the law does not impinge on this question, since there is no law mapping bank employee designations to legally-defined officers of a bank.
  - deciplex 12y ago
    Here's the law in question, for the record: >Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) . . . may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. You'll notice that, unlike the article above (and a few other sources), there is nothing here about 'other employees' or agents of the company or whatever else. It is strictly officers and directors. But, I'm surprised it's ambiguous that he's an officer. I don't work for Goldman, but I do work for a similarly large corporation in the same industry, and I can tell you there is no question that I'm an officer, at least according to the company bylaws, where I have to follow even the rules laid out specifically for officers. I assume it was the same for him, since he's in a similar position to myself (actually, a bit higher up, even). Perhaps the bylaws at Goldman are just weirdly ambiguous and open to interpretation. Knowing what I know of management culture at Goldman Sachs, it would not surprise me in the slightest to learn they chose to keep them this way. However, if they are wording their bylaws in such a way, I see no reason for the court to give them the benefit of doubt in determining whether he's an officer. I mean, taken at face value, all you're saying is that a company never has to follow this law, since they can always claim someone isn't an officer or director.

code_monkey_vp 12y ago

VP is common across the 'Murican banks. I am one, albeit in a different continent. VPs don't need to manage a team, but they do often shoulder some responsibility for a project, or maybe, even run the project. Usually, it is the level of pay that bumps them into the VP bracket. Not much else.

wclax04 12y ago
And American VPs are Executive Directors in the UK

Tosh108 12y ago

Why are legal costs so ridiculously high in the states?

rayiner 12y ago
Because we have many rich people and corporations willing to spend a lot of money to make sure they don't lose their cases. According to Wikipedia, Aleynikov was making over $1m per year at a Goldman competitor after he left. And it looks like he got his money's worth. There was no dispute that he took the code. His "open source" defense apparently fell through, and a jury convicted him. He only won on appeal because he convinced the Second Circuit that software wasn't a trade secret within the Electronic Espionage Act, something which Congress went and explicitly my added in response to the court case.
- foobarqux 12y ago
  I don't think Aleynikov started his job at his subsequent employer, they rescinded his offer after the Goldman allegations.
  - deleted 12y ago
    [deleted]
- sanderjd 12y ago
  So then your parent's question degenerates to, why does spending more money correlate with winning more cases? Which is a much more interesting question.
  - dredmorbius 12y ago
    Three pathways. 1. Money is a means of resource allocation. More money, more resources. 2. War of attrition. Raising costs on the other guy makes settling or coming to some sort of settlement more likely. 3. Scorched earth. GS may be trying to send a message not so much to Alyenkov as to any other programmers who'd be willing to entertain a similar stunt. See recent coverage of Amazon's frequent, but nearly entirely unsuccessful, pursuit of noncompetes against former employees. In particular, bcantrill's comment: https://news.ycombinator.com/item?id=7975428 https://news.ycombinator.com/item?id=7975428 the fact that we had prevailed against Amazon also gave these engineers the confidence that we could and would do so again -- and ultimately, it didn't prevent anyone from matriculating. It did, however, have one lasting effect: the engineer that was pursued went from thinking fondly of his years at AWS to hating AWS and Amazon with a white-hot passion that still burns today. In the end, enforcing a non-compete is like erecting a Berlin Wall: if you feel you need it, you have much deeper problems...

ianstallings 12y ago

Goddam the links on that article are annoying. None of them are sources, just links to general "topics" under bloomberg. Completely confusing. Read this instead: http://en.wikipedia.org/wiki/Sergey_Aleynikov http://en.wikipedia.org/wiki/Sergey_Aleynikov That being said, this just shows how much power Goldman wields with the establishment and it was kind of a scary insight into their recorded weirdness. Basically they just said to the FBI that he stole the source code and he could possibly use the code to manipulate markets. This is a guy that writes the code to manipulate markets, but then he was a criminal, because he might do it for himself. The whole thing is insane IMHO.

newaccountfool 12y ago
One of the charges sounds completely ridiculous. "unlawful use of secret scientific material"
rhizome 12y ago
Goddam the links on that article are annoying. None of them are sources, just links to general "topics" under bloomberg. Completely confusing. It's ILA: Internal Link Architecture. It was the hot thing several years back. http://www.seobook.com/archives/002332.shtml http://www.seobook.com/archives/002332.shtml

deleted 12y ago

[deleted]

davidw 12y ago

I hope everything ends up well for him. I've been a very appreciative user, and occasional committer to erlexec: https://github.com/saleyn/erlexec https://github.com/saleyn/erlexec It was kind of a shock when I put 2 and 2 together and realized who the author was, as I'd already been using the code for a while.