Goldman, Stanford, Insider Trading, Facebook, BNY, JPMorgan in Court News

A former Goldman Sachs Group Inc. (GS) computer programmer was freed after his conviction for stealing the bank’s high-speed trading code was reversed by a U.S. appeals court.
Wearing a gray sweatsuit, white tennis shoes and a huge grin, Sergey Aleynikov, 42, left the Manhattan courthouse where he had been convicted in December 2010 and entered a waiting car with his lawyer, Kevin Marino.
“Justice occasionally works,” Aleynikov told reporters as he left. “This was such big news to me I haven’t had any time to think about what would happen.”
Aleynikov, a naturalized U.S. citizen born in Russia, said he hoped to be with his three daughters, ages 8, 6 and 3. Until Feb. 17, he had been serving an eight-year sentence at the federal prison in Fort Dix, New Jersey.
After hearing oral arguments from both prosecutors and Marino on Feb. 16, the U.S. Court of Appeals in Manhattan issued a one-page order vacating Aleynikov’s convictions for economic espionage and the interstate transportation of stolen property. The appeals court said it would issue an opinion explaining the ruling later.
The appeals court also issued a mandate that would have foreclosed any further challenge to its decision. The office of Manhattan U.S. Attorney Preet Bharara persuaded the court to set aside the mandate so it can argue for a rehearing of the appeal, either before a three-judge panel or all the court’s available judges. Ellen Davis, a spokeswoman for Bharara’s office, declined to comment on the ruling.
U.S. District Judge Denise Cote, who presided over the trial, ordered Aleynikov released from prison Feb. 17.
Aleynikov was convicted by a jury of violating the Economic Espionage Act and the Interstate Transportation of Stolen Property Act. He was sentenced last March.
On his last day of work at New York-based Goldman Sachs in June 2009, Aleynikov uploaded hundreds of thousands of lines of source code from the firm’s high-frequency trading system, prosecutors said.
He circumvented Goldman Sachs’s security, sent the code to a server in Germany, compressed and encrypted it, and took it with him to a meeting with new employers in Chicago, the U.S. said. Prosecutors argued Aleynikov wanted it as a “cheat sheet” to start a trading system at his new job.
During oral arguments on Feb. 16, the three-judge appeals panel criticized the government’s application of the espionage act to Aleynikov’s actions, asking the prosecutor how the crime occurred and how it affected commerce.
The judges -- Dennis Jacobs, 67, Guido Calabresi, 79, and Rosemary Pooler, 73 -- also asked if taking Goldman Sachs’s trading code was comparable to taking copyrighted material or bringing an employee manual to a new job.