The next hearing in U.S. v. Sergey Aleynikov, the most disgraceful criminal prosecution since the Duke Lacrosse Case, will be held this coming Wednesday. While we don't know whether the charges against Aleynikov will be dismissed, there has been a related development.
Sept. 10 (Bloomberg) -- The U.S. Securities and Exchange Commission is "rigorously" investigating whether traders are using technology to manipulate markets, the agency's enforcement and inspections chiefs said today.
The regulator is probing suspected “market manipulation based on complex use of technology and advanced trading systems,” said SEC Enforcement Director Robert Khuzami and acting examinations director John Walsh in testimony prepared for a Senate Banking Committee hearing. They said the inquiry is among a list of active cases, also including unspecified Ponzi schemes, hedge-fund abuses and insider trading.
The Goldman Sachs programmer, Sergey Aleynikov, was arrested July 3 and charged the next day with theft of trade secrets and transportation of stolen property in foreign commerce. At Aleynikov’s arraignment, Assistant U.S. Attorney Joseph Facciponti said the programmer transferred code to a computer server in Germany and that others may have had access to it, a claim Aleynikov has denied. He is free on $750,000 bond.
Given that the Department of Justice did nothing about Bernie Madoff for years, members of the public as well as federal judges must ask how Goldman Sachs was able to reach the FBI at 3 a.m. to report theft of computer code; and have an arrest 48 hours later. Does Goldman Sachs have a bat phone that connects to the Department of Justice? If DOJ doesn't dismiss the case against Sergey, we might just find out.