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Businesses Government The Courts News

Goldman Sachs Trading Source Code In the Wild? 324 324

Hangtime writes "The world's most valuable source code could be in the wild. According to a report by Reuters, a Russian immigrant and former Goldman Sachs developer named Sergey Aleynikov was picked up at Newark Airport on July 4th by the FBI on charges of industrial espionage. According to the complaint, Sergey, prior to his early June exit from Goldman, copied, encrypted and uploaded source code inferred to be the code used by Goldman Sachs to process in real-time (micro-seconds) trades between multiple equity and commodity platforms. While trying to cover his tracks, the system backed up a series of bash commands so he was unable to erase his history, which would later give him away to Goldman and the authorities. So the question is: where are the 32MB of encrypted files that Sergey uploaded to a German server?
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Goldman Sachs Trading Source Code In the Wild?

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  • Re:Surely not? (Score:3, Informative)

    by McGiraf (196030) on Monday July 06, 2009 @08:35AM (#28593165) Homepage

    A root password list is no source code...

  • by Anonymous Coward on Monday July 06, 2009 @08:38AM (#28593189)

    A brilliant coder...

    who's never heard of "history -c"???

  • by tacokill (531275) on Monday July 06, 2009 @08:43AM (#28593241)
    ...or, perhaps last week was a short trading week which cut into the already-low trading volume. Did you by chance compare the overall volume levels when you came up with your theory?

    I am betting you didn't because if you had, you'd see that the volume last week was way lower than the norm.

    More likely, lots of GS traders just took the week off and went on vacation.
  • Re:Surely not? (Score:2, Informative)

    by GigaHurtsMyRobot (1143329) on Monday July 06, 2009 @08:45AM (#28593265) Journal
    It would help if I RTFA:

    The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.

    --

    sounds like cheating to me...

  • Non-story (Score:5, Informative)

    by Anonymous Coward on Monday July 06, 2009 @08:47AM (#28593293)

    GS's code for program trading is all written in a proprietary programming language called slang and relies on a proprietary database (secdb).

    The install for that is a hell of a lot bigger than 32 MB, so this is probably just a few trading algorithms that a pissed-off developer has copied away.

    It will be largely useless without the slang and secdb components and will be totally unsafe to trade off without a sufficient source of historic data and reference data, correctly formatted and loaded into secdb.

    The idea that this leak is likely to be in any way materially damaging to GS is frankly a joke to anyone with even a passing knowledge of how these systems really operate.

    But don't let that get in the way of your paranoia about how the world works.

  • by xaxa (988988) on Monday July 06, 2009 @09:09AM (#28593479)

    unset HISTFILE and he (might) have been OK.

  • by eldavojohn (898314) * <{eldavojohn} {at} {gmail.com}> on Monday July 06, 2009 @09:12AM (#28593517) Journal

    including a level of encryption that is so high it would take the NSA days to decrypt it

    Keep in mind that encryption, right now, can be strong enough to take millions of years to decrypt.

    You, sir, are correct. Although, I must inquire that if you're making several thousand transactions a week and you're writing software to whereby the transaction frequency matters to you (probably down to the millisecond) do you have the time to waste in encrypting/decrypting this? I would imagine that while it would take millions of years to decrypt it would also take several seconds to encrypt. That's time they don't have.

    Also, if you are doing transaction with foreign institutions or exchanges then you may incur the wrath of exporting a weapon and putting national security at risk by deploying your software overseas. I know that sounds stupid for me to say. But you see, ever since Phil Zimmerman's [philzimmermann.com] arrest and subsequent release (and even more subsequent celebration), people have been wary of crossing that line.

  • by Pixie_From_Hell (768789) on Monday July 06, 2009 @09:22AM (#28593625)
    It's a good alternate theory, but you're a week off:

    On the week ending June 19, Goldman, for instance, was ranked first on the NYSE program trading list. But on the week of June 22, Goldman mysteriously didnâ(TM)t appear on the list of the top 15 firms at all.

    So unless the Fourth of July is celebrated in June, I think that's not the issue.

    Of course, I'm not checking the volume of trading either, so there could be something to your theory. (Of course, if GS bailed out for a week, wouldn't that lower the volume significantly? Weren't they the number one traders?)

  • by Enleth (947766) <enleth@enleth.com> on Monday July 06, 2009 @09:40AM (#28593771) Homepage

    But it's an instant giveaway that something sleazy is going on. Every automated security auditing tool checks for that and every sysadmin worth his salary knows this "trick".

  • by Anonymous Coward on Monday July 06, 2009 @09:48AM (#28593835)

    Some would argue that the current government of Russia is a Mafia organization.

    "In Soviet Russia, government is the Mafia."

    Poor Yakov. How could he have known he'd be the most bang-on political pundit of the next century?

  • by Anonymous Coward on Monday July 06, 2009 @09:53AM (#28593889)

    unset HISTFILE and he (might) have been OK.

    Not likely... since most financial institutions capture not only the commands, but the output to STDOUT/STDERR, and that is logged outside, upstream of the physical machine, using tools like PowerBroker, Sudoscript, and others.

    I know, because I work for $LARGE_BANK, and we use it there. You can't just symlink ~/.bash_history to /dev/null, or unset HISTSIZE or any of that.. even the !shell trick out of vim doesn't help, because everything you type and everything it outputs, is logged where you can't wipe it out.

  • by zarkill (1100367) on Monday July 06, 2009 @09:53AM (#28593897)

    It would be like someone offering the secret of Coke to Pepsi - what do you expect Pepsi to do?

    that very thing happened a few years ago - http://news.bbc.co.uk/2/hi/business/5152740.stm [bbc.co.uk]

    pepsi declined the offer and reported it as a theft of trade secrets.

  • Re:Surely not? (Score:2, Informative)

    by Dishevel (1105119) * on Monday July 06, 2009 @10:15AM (#28594139)
    In the old days banks were never "simply a place to store and borrow money". They started and have always been a place for bankers to make money by providing their customers a service. The real problem is the millions of people who throw their money in a bank they know nothing about.
  • by demachina (71715) on Monday July 06, 2009 @10:51AM (#28594497)

    Good point but Goldman Sachs deserves to be loathed. They are behind some of the most malevolent behavior that has damaged our economy while they profit dating back to the Great Depression. They were probably a leading creator of the housing bubble and crash which has wiped out trillions of dollars of average peoples wealth. They are also leading commodity manipulators, they have a letter from the U.S. government exempting from commodity laws to prevent speculation. They may be partially responsible for the oil price spike above $140, and last years spike in food prices that caused food riots and starvation in the third world.

    You do have to give them credit that they manage to cause catastrophic collapses when the bubbles they help create bursts, and still manage to walk away unscathed. During the house bubble they created mortgage backed securities they knew were garbage and then suckered AIG in to writing credit default swaps on them so they won when they sold the crap and then won again when it went to hell. At least ten billion dollars of your tax dollars went in one door at AIG and out the back door in to Goldman Sachs pocket as reward for creating garbage mortgages.

    Rolling Stone has a good expose on them though the bootleg version has been pulled offline due to "copyright infringement". Its called "The Great American Bubble Machine".

  • Re:Proving theft.. (Score:4, Informative)

    by aricusmaximus (300760) on Monday July 06, 2009 @11:03AM (#28594643)

    If you had RTFA'd you might have gone to http://zerohedge.blogspot.com/2009/07/is-case-of-quant-trading-industrial.html [blogspot.com] and read the affidavit - http://www.zerohedge.com/sites/default/files/Complaint_--_Aleynikov.pdf [zerohedge.com], you would see that (a) they have proof that the file was transfered (b) they know *exactly* which server the files were uploaded to and (c) Sergey Aleynikov has already confessed to copying the files.

    Should be interesting to see how the police "generate" and prove the evidence on this one.

    It's all there in the affidavit.

  • There is a long article in Rolling Stone magazine this month, The Great American Bubble Machine [rollingstone.com], alleging that banks control the U.S. government and that Goldman Sachs is one of the leaders of the corruption. Anyone wanting to know more about how the financial corruption of the U.S. government is operated should read the article. The article alleges that Goldman Sachs will use any manipulation whatsoever to get money.

    This Slashdot comment, The Investment Banking cohorts JPMorgan Chase and Goldman Sachs are the **huge** winners [slashdot.org], discusses some of the issues. The Slashdot comment links to the Rolling Stone article, but that copy of the article has been removed.

    According to the Rolling Stone article, Goldman Sachs makes money mostly through corruption, not investment insight. Your tax money may be their profit: Goldman Sachs takes $12B Bailout, Hands out $14B Bonuses [digg.com]. (The article lists British pounds, the Digg article lists dollars.)

    The corruption is not new. For example, see the May 13, 2002 article in Business Week, How Corrupt Is Wall Street? New revelations have investors baying for blood, and the scandal is widening [businessweek.com] Quote: "Consider Enron, which has paid $323 million to Wall Street in underwriting fees since 1986, according to Thomson. Goldman, Sachs & Co. (GS ) pocketed $69 million of that..." Enron, of course, went bankrupt when it was discovered the company was dishonest.

    Beginning in 2002, Warren Buffett began very publicly calling derivatives "financial weapons of mass destruction" [bbc.co.uk]. That particular part of the corruption was caused by the removal of laws designed to prevent fraud, at the beginning of George W. Bush's first term. Nothing was done to reinstate the laws, and that's why we are suffering now. Why was nothing done? Numerous articles say the corruption was allowed to happen because Goldman Sachs people control the U.S. government's Federal Reserve Bank. To give a small indication of the level of corruption, the "Federal Reserve Bank" is not federal, there is nothing in reserve, and it is not a bank.
  • Re:Surely not? (Score:3, Informative)

    by nacturation (646836) * <nacturation.gmail@com> on Monday July 06, 2009 @12:59PM (#28596183) Journal

    It's more like multi-level marketing than a ponzi. With a ponzi scheme, it's impossible to carry on long-term because the offer (investment) generally has no intrinsic value whatsoever. With multi-level marketing, the offer (product/service) generally does have value, but it comes with an overly inflated price resulting in a large number of people losing money in order to have others make money.

  • Re:Surely not? (Score:3, Informative)

    by HungryHobo (1314109) on Monday July 06, 2009 @02:39PM (#28597717)

    One hole.
    If the company pays dividends to the shareholders of say 5 or 10 percent and you simply buy and do no more you'll eventually make back your investment over 10-20 years.
    Now if you want to make money short term the thing to do is of course to go for the quick profit but shares don't have to be a hole to throw money into.

  • During the time of the oil price increase, the supply of oil went up a small amount, and the demand went down by a tiny amount. There should have been a tiny price decrease.

    However it was accomplished, it was market manipulation. I don't have time to supply links now.

Gosh that takes me back... or is it forward? That's the trouble with time travel, you never can tell." -- Doctor Who, "Androids of Tara"

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