Court overturns conviction for theft of Goldman source code

[InfoSec News <alerts () infosecnews org>]

http://arstechnica.com/tech-policy/news/2012/04/a-federal-appeals-court-has-2.ars

By Timothy B. Lee
ars technica
April 11, 2012

A federal appeals court has thrown out the conviction of a former Goldman Sachs 
programmer who stole source code from the firm's high-frequency trading (HFT) 
system. The court holds that the defendant's actions did not fit the 
definitions of the federal crimes for which he had been convicted. "We decline 
to stretch or update statutory words of plain and ordinary meaning in order to 
better accommodate the digital age," the court wrote.

Sergey Aleynikov was a top programmer for Goldman Sachs until he left in 2009 
to work for a start-up firm planning to build a competing high-frequency 
trading system. Just before he left, he uploaded a copy of Goldman's HFT code 
to a remote server. He later downloaded the files to his home computer, but his 
actions were discovered and he was arrested by the FBI a few weeks later.

Aleynikov was indicted under two federal statutes, the National Stolen Property 
Act (NSPA) and the Economic Espionage Act (EEA). He was convicted by a lower 
court in 2010, but the United States Court of Appeals for the Second Circuit 
overturned his indictment, releasing its opinion on Wednesday.

The NSPA makes it a crime to “transport, transmit, transfer in interstate or 
foreign commerce any goods, wares, merchandise, securities, or money." The 
government argued, and the lower court agreed, that the source code met the 
definition of "goods, wares," and "merchandise." But the Second Circuit reached 
the opposite conclusion, ruling that these terms only include tangible objects.

[...]

_______________________________________________
LayerOne Security Conference
May 26-27, Clarion Hotel, Anaheim, CA
http://www.layerone.org