Computer Fraud and Abuse Act Count Dismissed Against Goldman Sachs Computer Programmer Charged with Stealing Source Code

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A New York federal Judge dismissed the Computer Fraud and Abuse Act (“CFAA”) count charging Sergey Aleynikov, a former computer programmer for Goldman Sachs & Co., with stealing the computer source code used in Goldman’s high-frequency trading system. U.S. v. Aleynikov, 2010 WL 3489383 *14-17 (S.D.N.Y. Sept. 3, 2010). The reasoning underlying this opinion underscores the need for the U.S. Supreme Court to resolve the conflict between the 9th Circuit and the 1st, 5th, 7th and 11th Circuits on the applicability of the CFAA to employees who steal data from their employers.

As described by the court, ”Aleynikov was responsible for developing and maintaining some of the computer programs used to operate Goldman's high-frequency trading system. Aleynikov resigned in June 2009 to work for Teza Technologies, LLC ("Teza"), a company founded earlier that year. Teza offered Aleynikov the title of ‘Executive Vice President, Platform Engineering,’ in which position he would be responsible for developing Teza's own high-frequency trading business that would compete with Goldman.” Id. at 1.

Based on his theft of Goldman’s source code, Aleynikov was charged with one count of violating the Economic Espionage Act for theft of trade secrets, Title 18, U.S.C. §§ 1832(a)(2) and (4), one count of violating the Interstate Transportation of Stolen Property Statute, Title 18 U.S. C. §2314, and one count of violating the CFAA, Title 18 U.S.C. §1030(c)(2)(B)(i)-(iii). The court granted the motion to dismiss the CFAA count while denying Aleynikov’s motion to dismiss the other two counts.

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Published In: Civil Remedies Updates, Criminal Law Updates, Labor & Employment Updates, Intellectual Property Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nick Akerman, Dorsey & Whitney LLP | Attorney Advertising

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