Did Goldman Sachs Overstep in Criminally Charging Its Ex-Programmer? 186
theodp writes "Programmer Sergey Aleynikov holds the dubious distinction of being the only Goldman Sachs employee since the 2008 financial meltdown to have actually served time in prison. After leaving Goldman, Sergey was accused of stealing computer code from his former employer and sentenced to eight years in federal prison. Exactly what he'd done neither the FBI nor the jury seemed to understand, so Moneyball author and financial journalist Michael Lewis decided to give Sergey a second trial, assembling a jury made up of programmers and people familiar with high-frequency trading, and asking them to level a judgment. Their verdict? Not guilty. 'I think it's quite possible that Goldman itself didn't know what he had taken, the value of it, the purpose of it, or anything else,' Lewis concludes. 'There was such turnover at Goldman, and the system was such a hairball, that I think people knew pieces but they didn't know the whole. Serge might have been as close as there was to an expert on the how the whole system worked. I think the valuable thing that Serge took when he walked out the door was himself.' Aleynikov was released on appeal in 2011, but subsequently re-arrested on state charges the following year, so he's still not out of the woods yet."
Lemme get this straight (Score:5, Interesting)
Of all the people who wasted and squandered the money of thousands, if not millions, nobody did time in prison, the only person who did was actually not stealing from decent people but from the thieves, and for THAT he goes to jail?
Re:Lemme get this straight (Score:4, Interesting)
Sometimes justice means both.
Asset forfeiture is sufficient.
Tell that to all the people who died of starvation because Goldman saw profits in artificially inflating the hard red spring wheat futures market.
No, sometimes "justice" does mean torches and pitchforks. Real monsters just don't take the hint otherwise.
Re: Lemme get this straight (Score:5, Interesting)
Re:Lemme get this straight (Score:2, Interesting)
They didn't re-release modified code, even if it was only a few lines, of course, violating the licensing terms.
Ok, I'll pull a "Citation required" card. Please show an OSS license that requires releasing code modifications if you have only just modified a private copy of the code and have not redistributed it. So far as I know, it's usually if you redistribute the software or made a copy publicly available are you to provide the changes.
I mean, is this whole thing a GPL-is-viral kind of blowup on Goldman's part? Does it boil down to Goldman fearing Serge Aleynikov violated GPL (or whatever license) by adding Goldman proprietary changes and pushing the changes to an SVN server outside of Goldman? And they feared it would've required redistribution of the entirety of their trading platform?
Goldman fearing GPL violation more than causing the global financial meltdown? Seriously?
Re:Lemme get this straight (Score:5, Interesting)
Their savings are held as bank deposits at private banks. The "money" the Fed is creating is held by the banks as reserve balances at the Fed itself. In our financial system there is only one operational pathway for reserve balances to enter the economy separately from their role in settling interbank payments, which is as physical U.S. currency AKA Federal Reserve Notes. Physical currency represents only a very small fraction of total reserves. Thus, the total size of all reserve balances held at the Fed has no bearing on the traded value of bank deposits denominated in dollars but held in the private sector (that is, the value of your and my savings). Like I said, Canada's banks typically have overnight reserve balances of ZERO, but that doesn't mean Canadians have no deposits at their private banks or that those deposits have infinite value.
Yet, QE does negatively affect the future value of our savings, not by harming the traded value of the dollar, but by reducing our interest income. During QE, the Fed exchanges reserves (bearing an 0.25% interest rate since 2008), which it "prints" (into a database), for securities (bearing ~3% in the case of Treasuries). The net financial assets of the private sector is unchanged, but its average rate of interest is decreased, negatively impacting its future income. Basically, the Fed is helping the government refinance at a lower rate, which is like a wealth tax on the government's creditors (including us, pensions, foreigners, companies, etc.).
TL;DR: QE is a Bad Thing, but because it decreases the amount of money we have and not the opposite.
Beyond simple theft (Score:4, Interesting)
If a person is deprived of a very large amount of savings, say an amount that exceeds the lifetime productivity of an average wage-earner, that crime should be put on the level of some lesser version of manslaughter. It's gone beyond theft at that point.
Re:Lemme get this straight (Score:5, Interesting)
You're surprised that banks almost get away with murder and have a fall guy take the blame? This stuff has been going on at _least_ since 2001.
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http://en.wikipedia.org/wiki/Brad_Birkenfeld [wikipedia.org]
In October 2001, Birkenfeld began working at UBS in Geneva, Switzerland, handling private banking, primarily for clients located in the United States. In 2005, he learned that UBS's secret dealings with American customers violated an agreement the bank had reached with the IRS.
He resigned from UBS in October 2005 and provided written whistleblower complaints to Peter Kurer, Head Counsel for UBS, and other UBS senior executives regarding the illegal practices of U.S. cross-border business.
He is the first person to expose what has become a multi-billion dollar international tax fraud scandal over Swiss private banking.[2] Despite his unprecedented, extensive and voluntary cooperation, and registering as an IRS whistleblower, Birkenfeld is the only U.S. citizen to be sentenced to jail as a result of the scandal.
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The fundamental problem is that the majority of people just don't give a crap about Accountability and Transparency and would rather watch their (un)reality TV so they don't have to think or do about how the government -- which is an extension of themselves -- is screwing up one of the greatest nations.
Justice (Score:4, Interesting)