Like those two Japanese "gentlemen" who were caught trying to smuggle a suitcase full of US Treasury bonds across the Swiss border, (and then conveniently vanished), another story cross the wire at Reuters this morning that would make a nice spy movie thriller. It involved the sudden disappearance of the world's #1 trading firm, Goldman Sachs, from the NYSE's daily post of the top 15 trading firms. How could Goldman, always #1, suddenly not even make the top 15? Then, mysteriously, the NYSE announces that it will no longer post this information, and with all the hoopla over Michael Jackson's death, no one noticed but a single intrepid blogger over at Zero Hedge, who complained about the secrecy and lack of much needed transparency in this shadowy world of securities trading.
Then it got interesting. The FBI arrested one Sergey Aleynikov, a computer specialist who had taken a post with a top "financial firm" to build real time trading software. After a short term of employment he suddenly leaves the company, but according to Zero Hedge:
"In the 5 days immediately preceeding his departure from "Financial Institution" (potentially GS), Sergey allegedly downloaded 32 megs of ultra top-secret quant trading proprietary code, that, according to Special Agent McSwain's affidavit, he then proceeded to encrypt and upload to a website in Germany, with a UK owner. One can only imagine the value of this "code" not only to Goldman but to the highest bidder. After all, from the affidavit: "certain features of the [code], such as speed and efficiency by which it obtains and processes market data, gives the Financial Institution a competitive advantage among other firms that also engage in high-volume automated trading.The Financial Institution further believes that, if competing firms were to obtain the [code] and use its features, the Financial Institution's ability to profit from the [code]'s speed and efficiency would be significantly diminished." Needless to say, many others are now also likely hot on the trail of the code."
So it looks like the Big Boyz got scammed, and the NYSE turned off the trading reports to cover up the story while Goldman was trying to sort out just how much of their secret trading code had been compromised. This story went from a blogger rant to possible big news when Matt Goldstein at Reuters posted on it this morning, (July 6). We'll see if it develops.
Then it got interesting. The FBI arrested one Sergey Aleynikov, a computer specialist who had taken a post with a top "financial firm" to build real time trading software. After a short term of employment he suddenly leaves the company, but according to Zero Hedge:
"In the 5 days immediately preceeding his departure from "Financial Institution" (potentially GS), Sergey allegedly downloaded 32 megs of ultra top-secret quant trading proprietary code, that, according to Special Agent McSwain's affidavit, he then proceeded to encrypt and upload to a website in Germany, with a UK owner. One can only imagine the value of this "code" not only to Goldman but to the highest bidder. After all, from the affidavit: "certain features of the [code], such as speed and efficiency by which it obtains and processes market data, gives the Financial Institution a competitive advantage among other firms that also engage in high-volume automated trading.The Financial Institution further believes that, if competing firms were to obtain the [code] and use its features, the Financial Institution's ability to profit from the [code]'s speed and efficiency would be significantly diminished." Needless to say, many others are now also likely hot on the trail of the code."
So it looks like the Big Boyz got scammed, and the NYSE turned off the trading reports to cover up the story while Goldman was trying to sort out just how much of their secret trading code had been compromised. This story went from a blogger rant to possible big news when Matt Goldstein at Reuters posted on it this morning, (July 6). We'll see if it develops.
