Conservatives and Liberals Have United
More on David Viniar's Statment Regarding Goldman Sachs v. Sergey Aleynikov

Joseph Facciponti Lied at Aleynikov Bail Hearing

Sergey Aleynikov allegedly stole some software from Goldman Sachs.  While on the job, Aleynikov, a former quant at Goldman Sachs, would allegedly downlownd Goldman's software.  Assistant United States Attorney Joseph Facciponti is prosecuting Aleynikov for theft of trade secrets.  At Aleynikov's bail hearing, Facciponti argued that Aleynikov should not be released on bail.  Yes, this is a trade secrets and not a murder prosecution. 

In oral argument before Magistrate Judge Kevin N. Fox, Facciponti stated:

If this code is allowed to go to a competitor or to an entity that is not necessarily legal but can start trading with this, the bank itself stands to lose its entire investment in creating this software to begin with, which is millions upon millions of dollars.

The bank’s profit margin will be eroded -- and I’ll explain why in a minute -- by the other competit activity. In addition, because of the way this software interfaces with the various markets and exchanges, the bank has raised a possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.

Bail Tr. at 8 (emphasis added).  (You may read the transcript here.)  Facciponti later stated:

In other words, they can take steps, they can start building a new program, they can -- I’m not exactly sure what steps they can take. But even if they could take steps, my understanding from them is that any dissemination of this program would be a substantial loss to them, a very substantial loss to them.

Bail Tr. at 10 (emphasis added).  Goldman Sach's Chief Financial Officer just issued a statement that directly contradicted Faciiponti's representations to Judge Fox.  Reuters is reporting:

After more than a week of silence, Goldman Sachs finally commented publicly on the alleged theft of computer codes by former programmer Sergey Aleynikov calling losses sustained as a result would be “very, very immaterial.”

Those words were spoken by David Viniar, Goldman’s Chief Financial Officer, in response to a Reuters question during a conference call with reporters to discuss the company’s robust second quarter earnings.

Aleynikov, a former Goldman computer programmer, was arrested on July 3.

“We still have all of the code,” Viniar said. “It is not like the code had been lost to Goldman Sachs. And even if it had been, it is a small piece of our business.”

There are many things suspicious about the Aleynikov prosecution.  Most suspicious: Allegedly Goldman Sachs called the FBI to report Aleynikov's theft on Wednesday, July 1, 2009.  Two days later, Aleynikov was arrested.  Aleynikov's bail hearing was held on July 4, 2009.  That's swift "justice."

During the bail hearing that occured just three days after Goldman Sachs allegedly called the FBI, Facciponti argued that Aleynikov should not be released because there was a chance that Aleynikov might release code that, according to Facciponti but which Goldman Sachs claims is a lie, "would be a substantial loss" to Goldman Sachs.

This prosecutions stinks.  Facciponti is up to no good.  Attempting to hold Aleynikov without bail - in a trade secrets case - was remarkably shady.  What's worse is that we have now learned that Facciponti lied in his failed attempt to keep Aleynikov in jail.

We all need to keep a watch on this unethical prosecutor who seems to be working as nothing more than a private lawyer for Goldman Sachs.  If anyone knows Magistrate Judge Kevin N. Fox, please pass on the Goldman Sachs report to him.  It's important for him to know that Facciponti committed fraud on the Court. 

It's also important that the trial judge - whomever that might be - know about Facciponti's fraud on the Court.  Facciponti has already been caught in one lie.  Let's let the trial court know in advaice that Facciponti is willing to break the rules in order to serve the interests of Goldman Sachs.