[Infowarrior] - Ex-Goldman Programmer Detailed His Code Downloads to FBI Agent

[Richard Forno]

Ex-Goldman Programmer Detailed His Code Downloads to FBI Agent

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSDxSdMlPTXU

By David Glovin and David Scheer

July 10 (Bloomberg) -- Sergey Aleynikov, the former Goldman Sachs  
Group Inc. computer programmer arrested last week for stealing  
software, told an FBI agent he uploaded proprietary code to an  
encrypted server he had used on “multiple occasions.”

Aleynikov, 39, told the agent around 1 a.m. on July 4 that he had  
logged into Goldman’s computers through remote access from his home  
and sent encrypted files to a repository server with the URL  
identifier svn.xp-dev.com, according to a copy of his FBI statement in  
court files in Manhattan federal court.

Xp-dev.com is registered to London resident Roopinder Singh, who  
describes himself on a blog linked to the site as a trading systems  
developer working in London’s financial services industry. The site  
offers “subversion hosting,” letting users track current and previous  
versions of programming code and other documents.

Singh told his customers in the blog yesterday that he’d been  
contacted by “local UK authorities,” who had seized his hard drives to  
examine them and shut his service down for 45 hours, beginning on July  
6, two days after Aleynikov’s arrest.

“It turns out that some idiotic moron a user had uploaded data on to  
the service that he/she was not authorized to have,” he said, crossing  
out the words “some idiotic moron.” “This is your basic intellectual  
property theft case here.”

Singh didn’t immediately respond to phone calls and e- mails. FBI  
spokesman Jim Margolin and Rebekah Carmichael, a spokeswoman for  
Acting U.S. Attorney Lev Dassin, declined to comment.

Assistant U.S. Attorney Joseph Facciponti said at Aleynikov’s  
arraignment July 4 that the alleged theft is the “most substantial”  
that the bank can recall.

‘Worth Millions’

“The proprietary code, worth millions of dollars, lets the firm do  
“sophisticated, high-speed and high-volume trades on various stock and  
commodities markets,” prosecutors said in court papers. Facciponti  
said a person misusing the code might be able to “manipulate markets.”

On his personal blog, Singh wrote that he provides his service free  
and that any code stored there is kept safe and encrypted before being  
backed up every night “off-site.”

Aleynikov, who holds dual U.S. and Russian citizenship, told the agent  
the files he sent to Singh’s server “have been not shared with any  
person or corporation” and that it “was not my intent be involved in  
any malicious action.”

Facciponti said at the arraignment that Aleynikov transferred the code  
to a computer server in Germany and that others may have had access to  
it, a claim that Aleynikov denied in his statement to the Federal  
Bureau of Investigation agent, Michael McSwain. The prosecutor said  
the U.S. was investigating whether other code was sent to the server.

Internet records indicate Singh’s Web site is located in Bavaria.

Other Instances

Aleynikov told McSwain he used the server on other instances.

“I have uploaded files to svn.xp-dev.com on multiple occasions over  
the last couple months,” Aleynikov said in the FBI statement. The  
phrase, “over the last couple months” is crossed out.

It was unclear if he used the server to store Goldman software or  
other code.

“The files that are proprietary information of Goldman Sachs has not  
been shared with any individual or corporation,” Aleynikov repeated  
near the conclusion of the three-page statement.

In the statement, Aleynikov laid out what had happened from the  
downloading of the files to their transfer to the server and his  
retrieval of them from it. He said that on June 5 he “created a  
tarball in an effort to collect open source work on Goldman Sachs  
server to which I had an account.”

Tarball

A tar file, which is sometimes called a tarball, is a compressed file.

“I had previously worked on the files,” he said.

He said he encrypted the files, then erased the encryption software  
and the tarball.

“I then erased the bash history,” he said, referring to a method of  
recalling commands used in previous computer sessions.

Goldman security measures prevent such deletions, which tipped the  
firm off to his activities, prosecutors said.

Aleynikov said in his statement that he downloaded the Goldman  
software to his home computer, his laptop computer and his thumb drive.

“The reason I uploaded to svn.xp-dev.com was because it was not  
blocked by Goldman Sachs security policy,” Aleynikov wrote. The  
phrase, “not blocked by Goldman Sachs security policy,” was crossed  
out and he added: “I wanted to inspect the work later in a more usable  
environment.”

More Than Intended

Aleynikov said that he later opened the files to inspect them.

“At that point I realized that I downloaded more files than I  
intended,” he said.

Aleynikov, who lives in New Jersey, was arrested on July 3 after  
arriving at Liberty International Airport in Newark. He was charged  
with stealing the trading software and is free on a $750,000 bond.

Teza Technologies LLC, a Chicago-based firm co-founded by a former  
Citadel Investment Group LLC trader, said after his arrest that it had  
suspended Aleynikov, who started there on July 2. Aleynikov had told  
co-workers at Goldman that he was joining a new firm at triple his  
salary of $400,000 a year.

Michael DuVally, a spokesman for New York-based Goldman, declined to  
comment.

Aleynikov said Teza wasn’t involved. “I have signed an agreement with  
my new employer not to bring any unlicensed software,” he said. “I  
have not violated that agreement.”

Studied Math

Aleynikov studied applied mathematics at the Moscow Institute of  
Transportation Engineering before transferring to Rutgers University,  
where he received a bachelor’s degree in computer science in 1993 and  
a master’s of science degree, specializing in medical image processing  
and neural networks, in 1996, according to his profile on the social- 
networking site LinkedIn.

Before joining Goldman Sachs, he worked for about eight years at IDT  
Corp., the U.S. vendor of prepaid calling cards, where he led the team  
responsible for developing routing systems, according to the profile.

His profile on LinkedIn describes him as a vice president in equity  
strategy at Goldman Sachs and includes two recommendations from  
colleagues at the firm.

The case is U.S. v. Aleynikov, U.S. District Court, Southern District  
of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York  
federal court at dglovin at bloomberg.net; David Scheer in New York at dscheer at bloomberg.net 
;

Last Updated: July 10, 2009 00:01 EDT