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.

Apple goes after Motorola and Google with legal guns blazing

One measure of how quickly events are unfolding in the smartphone patent wars is the number of typos appearing in Florian Mueller's FOSS Patents dispatches. The German-born blogger's coverage of the "thermonuclear war" Steve Jobs promised to unleash against Google's (GOOG) Android operating system are closely read by all sides in the cross-continental disputes, and lately he's hardly had time to breathe, never mind spellcheck. "There's just too much going on these days," he wrote in the second of two long reports filed Saturday, "and contrary to popular misbelief (which I've seen on Twitter), I do sleep." As Mueller sees it, the subject of his two latest reports, a pair of federal lawsuits filed by Apple (AAPL) in two California district courts, are signal events that could turn the tide in Cupertino's favor. Galaxy Nexus In the Northern District: In the first suit, Apple is asking for a preliminary injunction against the Galaxy Nexus -- the official "Ice Cream Sandwich" lead device developed by Samsung in close cooperation with Google -- based of four court-tested "high-powered" patents that Mueller dubs the Four Horsemen of the Apocalypse. Google's decision to keep using one of them -- the so-called "data detector" patent -- in the latest version of Android, even after the U.S. International Trade Commission ruled that an HTC Android phone had infringed it is, in Mueller's words, "unfair vis-à-vis HTC..., snubs Apple, and shows disregard for intellectual property in general and the ITC in particular. This is a case of willful, extremely reckless infringement." In the Southern District: Here Apple is trying to shut down Motorola Mobility's (MMI) legal strategy -- endorsed implicitly and "irrevocably" last week by Google, which is about to purchase MMI -- of blocking sales of iPhones in Germany on the grounds that they infringe industry-standard broadband patents that Motorola pledged years ago to license to all comers on so-called FRAND (fair, reasonable and non-discriminatory) terms. Motorola licensed the patents to chipmaker Qualcomm (QCOM) and that license would normally extend, by the principle of "patent exhaustion," to a company like Apple that buys Qualcomm chips. But in an exchange of letters revealed in Apple's suit, Motorola asked Qualcomm "to terminate any and all license and covenant rights with respect to Apple, effective February 10, 2011." Mueller writes that "even though Qualcomm may benefit from weak patent exhaustion defenses in other situations because it is a major patent holder who could do a lot of 'double-dipping', it appears that it supports Apple, and I don't think that's just because Apple is a customer. I think it's most likely because MMI's discriminatory termination relating to only Apple is, quite probably, unjustifiable and ineffectual." "If it's true that patent exhaustion is a valid defense in Apple's favor," Mueller concludes, "Google-MMI is playing with fire here." Apple was forced to temporarily remove the iPhone 3G and 4 from its German online store based on Motorola's FRAND complaint, and now sales of the iPhone 4S could be at risk. The company is seeking damages that could run to many billions of dollars.