Posted on 07/06/2009 12:40:57 AM PDT by TigerLikesRooster
A Goldman trading scandal?
Posted by: Matthew Goldstein
Did someone try to steal Goldman Sachs’ secret sauce?
While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution—that sources say is none other than Goldman Sachs.
The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major “financial institution” generate millions of dollars in profits each year.
The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.
The criminal case has the potential to shed a light on the inner workings of an important profit center for Goldman and other Wall Street firms. The federal charges also raise serious questions about the safeguards Wall Street firms deploy to protect their proprietary trading systems.
The criminal case began to unfold on the evening of July 3 when Aleynikov was arrested by FBI agents at Newark Liberty Airport, after returning from Chicago. Aleynikov had just started a job with another firm in Chicago, after leaving the big firm in NY in early June. It appears the financial institution allegedly victimized by Aleynikov had alerted federal authorities that its former employee might be up to no good.
(Excerpt) Read more at blogs.reuters.com ...
I do understand the difference between using a black box program and using inside info and direct government influence to structure profiteering schemes at the expense of regular investors. I also understand the fleecing of investors which takes place at almost every brokerage as a matter of course. Goldman just happens to be the most well connected, with Morgan not far behind, of the investment firms. There’s plenty of info on this subject.
Who do you think Geithner works for? We the people? Don’t make me laugh.
Same with Paulson, Kashkari, Robert Rubin, and the list goes on for quite a while.
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