On January 24, 2017, the New York State Supreme Court Appellate Division, First Department, reinstated defendant Sergey Aleynikov’s (“Aleynikov”) guilty conviction for stealing trading software from Goldman Sachs (“Goldman”). The decision came after a series of litigation that sought to determine whether Aleynikov violated federal or state law by making an electronic copy of the software on an external hard drive just before he left Goldman to work at a competing company.
Aleynikov was formerly an employee of Goldman Sachs, where he worked as a computer programmer. During his time with Goldman, Aleynikov wrote and maintained software for high frequency trading computer programs, which are central to Goldman’s business. Goldman took several measures to safeguard the software, some of which included increasing security, limiting employee access, and requiring all employees to sign a confidentiality and nondisclosure agreement. In 2009, Aleynikov left Goldman to work for Teza Technologies, one of Goldman’s competitors. Before he left, he transferred a digital copy of Goldman’s trading software to a hard drive outside the company’s server. As a result, he faced criminal charges in federal and state court.
In February 2010, Aleynikov was charged with violating the National Stolen Property Act and the Economic Espionage Act. In December 2010, the United States District Court for the Southern District of New York convicted him. However, on appeal the US Court of Appeals for the Second Circuit reversed his conviction in April 2012.
Shortly after, in September 2012, Aleynikov was charged by the state of New York in New York County with two counts of unlawful use of secret scientific material and one count of unlawful duplication of computer related material. After trial in July 2015, the jury acquitted Aleynikov on the unlawful duplication of computer related material charge, and the court dismissed the charges for unlawful use of secret scientific material. The People appealed, and on January 24, 2017, the New York Supreme Court Appellate Division reversed, and reinstated his conviction with respect to the unlawful use of secret scientific material charge.
The Appellate Division reasoned that the evidence was sufficient to establish that Aleynikov misappropriated scientific information. According to the court’s decision, Aleynikov did not challenge the People’s contention that he electronically copied the Goldman software, nor did he deny that the software constitutes secret scientific material. Furthermore, the court rejected Aleynikov’s arguments that he did not possess requisite intent to commit the offense and that he did not make a tangible copy of the software.
The case is The People of the State of New York v. Sergey Aleynikov, New York State Supreme Court, Appellate Division, First Department, No. 4447/12. A copy of the court’s opinion can be found here: http://tsi.brooklaw.edu/cases/people-state-new-york-v-sergey-aleynikov/filings/sergey-aleynikov-found-guilty-again-stealing-