The Sorry Tale of Goldman Sachs, the FBI and Sergey Aleynikov

Sergey Aleynikov

aleynikov.org

Michael “Moneyball” Lewis has written a lengthy article for Vanity Fair in which he suggests that ex-Goldman Sachs employee Sergey Aleynikov may not have done too much to deserve a jail sentence other than piss off his omnipotent employer:

To Sergey Aleynikov’s new way of thinking, every American could benefit from some time in jail, but in the event that you are yourself actually arrested and sent away, “there are certain practical aspects to keep in mind.” First, dress warmly. Detention centers tend to be freezing cold, even in summer, and so if you happen to be wearing shorts or short sleeves you’re in for a spectacularly unhappy night. Second, carry no cash. “If you have money, they charge you a convenience fee,” he explains. “If you don’t have it, they don’t charge you. The less money you have on you, the better.” Third, memorize a couple of emergency contact phone numbers. On the night of his first arrest he discovered he didn’t actually know his wife’s cell-phone number. He’d always phoned her by name from his cell phone’s address book, but his phone was one of the first things they’d taken from him.

The fourth, and final, rule was by far the most important: Don’t say a word to government officials. “The reason you don’t,” he says, “is that, if you do, they can place an agent on a witness stand and he can say anything.”

On the night of July 3, 2009, as he came off a flight from Chicago to Newark, New Jersey, he was totally unprepared, because he’d never imagined himself as the sort of person who might commit a crime. He worked too much and took only the vaguest interest in his fellow human beings, but, up to the moment of his arrest, Aleynikov had no sense that there was anything wrong with him or his situation. On the surface, his life had never been better: his third child had just been born, he had a new job at a hedge fund that paid him a million dollars a year, and he’d just moved into a big new house of his own design that he thought of as the perfect home. He’d come to America 20 years ago with little English and less money. Now he was living the dream.

For much of the flight from Chicago he’d slept. Leaving the plane he had noticed three men in dark suits, waiting in the alcove of the Jetway reserved for baby strollers and wheelchairs. They confirmed his identity, explained they were from the F.B.I., handcuffed him, and walled him off from the other passengers. This last act was no great feat. Serge was six feet tall but weighed roughly 130 pounds: to hide him you needed only to turn him sideways. He resisted none of these actions, but he was genuinely bewildered. The men in black refused to tell him his crime. He tried to figure it out. His first guess was that they’d gotten him mixed up with some other Sergey Aleynikov. Then it occurred to him that his new employer, the legendary high-frequency trader Misha Malyshev, might have done something shady. Wrong on both counts. It wasn’t until the plane had emptied and they’d escorted him into Newark Airport that they told him his crime: stealing computer code owned by Goldman Sachs…

[continues at Vanity Fair]

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  • Liam_McGonagle

    I don’t really feel all that sympathetic to this guy.

    Algorithmic trading, in itself, is evil. It divorces market pricing from the underlying real economic context that serves as the market’s sole legitimating purpose. Algorithmic trading doesn’t increase any efficiencies. It just transfers money from suckers (i.e., people who don’t own the market’s IT and liquidity infrastructures) to parasitic creatures of prey.

    All Aleynikov is doing here is obfuscating. He’s trying to play off the arcane philosophical lacunae between an employee’s innate skill set and employee work product that belongs, by explicit contract, to the employer, hoping that we’ll forget that his whole enterprise is criminal to its core.

    I should feel more sympathy for a little thief as compared to a big thief? You’re both thieves! And if you think that I believe for one moment that you wouldn’t use the same powers to crush anyone less powerful than yourself, you truly are a f*cking idiot, Mr. Aleynikov.

    • BuzzCoastin

      “Why aren’t you angry?” Serge just smiled back at him. “No, really,”
      said the other. “How do you stay so calm? I’d be fucking going crazy.”
      Serge smiled again. “But what does craziness give you?” he said. “What
      does negative demeanor give you as a person? It doesn’t give you
      anything. You know that something happened. Your life happened to go in
      that particular route. If you know that you’re innocent, know it. But at
      the same time, you know you are in trouble and this is how it’s going
      to be.” To which he added, “To some extent I’m glad this happened to me.
      I think it strengthened my understanding of what living is all about.”
      …When I was arrested I couldn’t sleep,” he says. “When I saw articles in the newspaper I would tremble at the fear of losing my reputation. Now I just smile. I no longer panic. Or panic at the idea that something could go wrong.”