Goldman Sachs Software Theft: When Employees Go Greedy
|
Office Space this is not. Some companies may not enforce confidentiality agreements, but not finanicial giant Goldman Sachs. Some employees give employers good reason to monitor and copy whatever is done on their computers, especially where propietary software is being used to make the company truckloads of money. Take the case of Sergey Aleynikov, a former high-ranking Goldman Sachs programmer accused of copying and stealing propietary trading software, sending it home and to some computers in Germany. The FBI nabbed Aleynikov at the Newark, NJ airport and have charged him with trade-secret theft. Aleynikov is now at out on $750,000 bail, according to Reuters. From the eWEEK Security Watch blog: On June 5, Goldman Sachs reportedly recovered a record of a series of commands entered in Aleynikov's desktop. According to the affidavit, among them was a script that was run that apparently copied, compressed and merged files containing code for the platform and some of its associated programs. After the script was run, the copied files were encrypted, renamed and uploaded to the Website. The program used to encrypt the files attempted to erase the desktop's bash history, but was unsuccessful because Goldman Sachs' computer system retained a copy... Aleynikov had left Goldman Sachs to take a job that was apparently tripling his already- lucrative salary of $400,000 a year. Hard to believe that he was only copying the open source aspects of the software and just happened to take most of the propietary parts too. Regardless, he should have known that copying and sending any part of it externally would cause such an uproar, especially in the financial world where the security is tight already. Security expert Bruce Schneier told the NY Times: "This is an example of a system of detection and response working." What hasn't been proven yet is whether the stolen goods were sold or distributed to anyone, but what is at stake here is pretty big. Some experts say this software may be difficult to use in the U.S, but has potential to be used by parts of the world less prone to obey U.S. law. Schneier again: "It is certainly possible that if you knew what the big guys were doing you could anticipate it and make money." He said that if a rival bank in the United States had been approached to buy the software, it would most likely have called the police, but a seller might have had better luck abroad. Because of cases like this, more and more companies are bound to get much more protective of their assets, including things you may see as pieces of innocuous technology that you worked on. In this case, it was not innocuous. There is a reason your company is monitoring what you do. Whether it's to make a buck or try and take what you think is yours, remember that you don't always own what you do and someone may enforce the protection of that work. |
For more IT Careers and Workplace News, check out eWeek Careers
Comments (4)
Don,
The flip side of this story is that it sure looks like Goldman Sachs had a management failure here. Clearly Sergey though that he could get away with something and not get caught. Good IT management would have been telling him from day one that 1) don't do illegal things because they could hurt the firm and land you in jail, and 2) don't do illegal things because you'll just end up hurting the people that you are working with.
Sure Sergey make the mistake, but it looks like there is plenty of blame to go around.
.
- Dr. Jim Anderson
The Accidental Successful CIO Blog
"Learn How To Think And Act Like A Successful CIO"
Posted by Dr. Jim Anderson | July 7, 2009 11:59 AM
This is actually a very serious issue - for Goldman Sachs. This case is going to reveal some of the inner workings of the trading machine.
The investment firm has alleged that this software is at the core of its competitive edge. The firm also warns that this software - if in the wrong hands - can lead to market manipulation.
So the most profitable trading firm on Wall Street who was a key beneficiary to the financial meltdown and has former executives running the Fed & Treasury of the current and previous administrations is now warning us that their trading software can be used to manipulate markets? Huh.
This is far more than a case of a employee gone rogue against a poor little old company. This is an employee exposing potentially illegal activities from a firm at the heart of the global economic crises. He screwed up by apparently trying to make a buck on his inside knowledge.
Posted by Jim Jones | July 7, 2009 5:46 PM
I have worked in Fortune 100 IT (banking) for over 15 years. Foreign nationals have no knowledge of US law --
They believe that ignorance is a forgiveable offense.
When any US company hires a foreign national and exposes them to trade secrets or sensitive information they are making a huge mistake. Foreigners don't care about US industry, the economy of national security. All they care about is money and themselves.
So I ask the former poster, if you have direct reports that don't give a crap about rule of law -- how do you impose upon them to follow rules?
And let's face facts here -- the greatest engineers are from China, India and Russia -- all 3 locations where being dishonest and crafty will get you much further in life than being a righteous, upstanding citizen.
If you want an employee who will know right from wrong (US Law) and have an allegiance for America and their colleagues... hire a native born American.
This guy is NOT a brilliant algorithmic developer? I think he stole the code (that other's wrote) because he's ignorant and he got a new job predicated upon his alleged ability as a maverick trading platform coder. His background just doesn't say anything about algorithmic or neural network type dev work (other than at GS) -- if anything it says 'switch and traffic optimization'.
And everyone who works in banking IT knows that every keystroke is being monitored... and if you do something wrong (even at home) you will get caught. Remember that whole Bear Stearns fiasco was uncovered on personal email/IM accounts that execs accessed at home (including their wive's accts).
Big brother is watching and you will get caught! I'm sure this Serge guy didn't give a r@ts a$$.
Posted by Jennifer | July 7, 2009 8:00 PM
just read a post on the net stating that sachs stole some of the code used in making their software from another bank. Justice I reccon!
Posted by db | July 7, 2009 11:40 PM