Court of Appeals Reverses Conviction on U.S. Trade Secret Statutes

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On April 11, the U.S. Court of Appeals for the Second Circuit handed a victory to a former Goldman Sachs employee convicted of stealing and transferring proprietary computer source code in violation of the National Stolen Property Act (NSPA), 18 U.S.C. § 2314, and the Economic Espionage Act of 1996 (EEA), 18 U.S.C. § 1832. The Court narrowly construed key terms in the statutes. The decision is available here.

In United States v. Aleynikov, the defendant spent two years at Goldman developing source code for its proprietary in-house high frequency trading system. When Aleynikov left the company he allegedly encrypted and uploaded to a computer server in Germany source code for the trading system in violation of his confidentiality agreement. He later allegedly downloaded the source code to his home computer, copied some of it to other computers and flash drives and brought it with him to a meeting in Chicago with his new employer (which was looking to develop a trading system). When he returned to New Jersey, he was arrested for violating provisions of the NSPA and EEA, found guilty and appealed to the Second Circuit....

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