IMHO, this story is mostly noise. Sergey Aleynikov took some source code home from the office one day ...and got caught.
Sergey should get a fair trial and if convicted, do very hard time as stealing Intellectual Property is abhorrent and repugnant, but his crime is not that of being a global criminal mastermind, it is of being a schmuck and a common thief.
Here's the deal...the source code in question, is in all likelihood, useless.
Here's why:
Goldman Sachs can be thought of as one big global grid of computers.
This massive grid of computers is run on a Category 5 Hurricane of software that takes an army of engineers, traders, quants, statisticians and the like build and maintain...It is one of the world's largest ongoing engineering efforts.
Goldman, in its unique market position, has lots of proprietary information flowing about that they analyze in real-time to make trading decisions which make them a lot of money.
Here's the catch...Sergey only has some of the source code that once compiled runs the Goldman Sachs grid....and you need most, if not all of it, to make real-time decisions.
I am not privy to the details of what is in the source code that Sergey stole, but even if it is Goldman's 'Crown Jewels' it won't work very well, and likely not at all, without all of the myriad of proprietary data feeds that Goldman is updating with almost every clock cycle on almost every processor in their grid.
Did Sergey steal all of this too? Can the code that he stole be installed and run in real-time? To do this, he would have to hack into every nook and cranny of the Goldman Grid to replicate this torrent of information that feeds the algorithmic decision making engine that only Goldman has access to.
Furthermore, if Sergey could replicate the entire Goldman Grid, does he have the capital needed to fire off these programs? Never mind all of the direct connections needed to all of the exchanges.
Lemme know if I am off base here.
Hello:
Just read ur article and he only down loaded 32 megabytes of information. The only thing, I can think of, in that realm is that it was used to shorten the execution time. Prop firms are fighting for tenths of millaseconds and if they are not first or second to the order, they are slow. I am aware of a recent transaction where one firm split off to another firm and in the buy out agreement there were 900k lines of code that had to be negotiated and the code doesnt work with out certian parameters. Just my two minutes of writing in a millasecond execution world.
Hi, 32mb of code is a lot of code. The PRICING algos are interesting if he decides to go and work for another bank. Some pieces of code are really interesting to see if you are trading complex derivatives instruments. No need for grid computing to price financial products. Grid is used to have may simple calculation run manytimes for simulation purposes.
Now this being said many traders have their excel spreadsheets on a usb key and it is no secret they move with THEIR spreadsheets to a new employer.
My conclusion, it depends what he intended to do with the code...
A couple of points. For one, it's GS' high-freq microstructure algos, not derivatives-pricing. 32MB is a huge amount of code. Sergey stated he was downloading open source code from GS' servers... then why offload the data to a German host if it's open-source? He was going to work for a high-freq startup at triple his pay; there is no way in Hell there was not an implicit agreement that GS' IP was not part of the deal.
code. Sergey stated he was downloading open source code from GS' servers... then why offload the data to a German host if it's open-source? He was going to work for a high-freq startup at triple his pay; there is no way in Hell there was not an implicit agreement that GS' IP was not part of the deal.
Always surprises me how people are willing to sound definitive about things that they don't know.
Leaving Goldman for 3x salary isn't remotely unusual.
It's obvious that a 32MB download wasn't just source code, but add a bunch of open source Java jars and 32MB is achievable. I don't know anything about this guy but its obvious that each year hundreds of people with access to the same code leave, and no employer can prevent you from taking what you know.
The guy may be a shmuck and a common thief, but it's my good guess that he's not an idiot. He no doubt knew what he was doing was illegal and could have serious consequences (jail, fines). He did it anyway. It's quite obvious that whatever he took was worth a lot and worth that risk. *Clearly* the sourcecode is not "useless." No way.
You can speculate all you want about what the code was for and what infrastructure would be required to put it to use, but what we know is: you don't have any idea what he took and how it might be put to use, while he knows exactly what he took and knows how it might be put to use. My money's on that guy knowing whether it's "useless" or not.
I agree that the code itself will hardly be enough to build up a Goldman-like machine. However Goldman has to make live hard for anyone next tempting to take code with him/her. The code itself might point out that the cleverness is reached by 90% speed and 10% intelligence. That would be worthwhile info after all..... Knowing that a party is making money with some kind of code is very helpful info and you need some clever people (and/or) yourself to spin off your own code