Wall Street Traders Charged With Copying Code To Start Their Own Company 145
coondoggie writes "Talk about starting a business on shaky ground. The Manhattan District Attorney's office says former Wall Street traders stole electronic trading source code and data from their then trading firm in an effort to start up their own financial business."
Sending yourself pilfered code through your company email account is probably not the wisest plan.
It's about time... (Score:3)
Re:It's about time... (Score:5, Insightful)
Information wants to be free, man. Seriously though this is par for the course in business. The only unusual thing is that they got caught and the courts are taking the claims seriously. Low hanging, fat, and easy, just the way the justice system likes 'em.
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I was thinking these guys are some major idiots because everybody knows that these nests of vampire have to maintian copies of all Emails to prevent insider-trading and all manner of illegal bloodsucking activities, not to be confused with the SEC santioned bloodsucking.
Re:It's about time... (Score:5, Interesting)
I have a friend who used to work for a prop trading firm and it sounds like this was par for the course. You trade based on a model...lots of traders are working it from different angles, so while it is guiding your actions, you don't actually know how it works inside. If you stick around long enough and work enough different desks, you might start to get an idea of how it works and if you become important enough, you might actually be told how it works (or help improve it).
Where did that model come from? Your bosses probably stole it from the trading firm they used to work at (where they stuck around long enough to get the model and get enough capital to seed a new trading firm). They probably didn't steal any actual source code, but they took the proprietary model and hired some new programmers (or took some of the original programmers) and had them recreate a version for their new firm. Its a trade secret, so it doesn't have protection like copyright or patents (but it lasts forever if you can keep it secret). Barring NDAs and noncompete clauses, you can't do anything if somebody copies your model and starts trading on it...so the mistake these guys made was that they stole actual code instead of just figuring out the algorithm and re-implementing it.
Re:It's about time... (Score:4, Informative)
Yeah, this is pretty much just a story of idiots.
Where did that model come from?
I guess it depends on the firm. The ones I worked for based their model on Black-Scholes (http://en.wikipedia.org/wiki/Black%E2%80%93Scholes) But that may have been specific to the instruments they were trading. The models were well known and based on published work and any edge they had was based on application or speed.
I agree they were idiots as Sarbanes-Oxley requires the retention of all company email.
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Yeah, this is pretty much just a story of idiots.
I guess it depends on the firm. The ones I worked for based their model on Black-Scholes (http://en.wikipedia.org/wiki/Black%E2%80%93Scholes) But that may have been specific to the instruments they were trading. The models were well known and based on published work and any edge they had was based on application or speed.
I agree they were idiots as Sarbanes-Oxley requires the retention of all company email.
For some definitions of company email. It's not all by any means. (having just done a mandatory records keeping training course) - of the past 100 emails in my inbox, perhaps 10 meet the criteria to retain.
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Information wants to be free, man. Seriously though this is par for the course in business. The only unusual thing is that they got caught and the courts are taking the claims seriously. Low hanging, fat, and easy, just the way the justice system likes 'em.
Its highly likely the company stole some of that code from their competitors in the first place.
Software reverse engineering is the cheap, but not as cheap as slipping some competitor's employee a couple hundred grand under the table, especially when there is potential for huge profits involved.
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Re:It's about time... (Score:5, Interesting)
No they are not. Madoff, Millikan, Skilling, Fastow. These people are convicts, no passports legally, no firearms legally. I would like to see the CONgressMAN who would do business with them, you know, the one's that go to prison themselves.
Re:It's about time... (Score:5, Interesting)
Yes they are: Goldman Sachs, JP Morgan Chase, Bank of America, HSBC, and a few others were prosecuted for multiple massive felonies, and settled out of court for a fraction of the profits from their crimes with no admission of guilt, after which the "Justice" Department dropped the cases against them. The people who were responsible for those crimes were never even prosecuted, much less sent to jail.
And we're not talking small-time crimes here. For example, HSBC was nailed for laundering $2 billion worth of drug money. All of the ones I just mentioned were nailed for approximately 2 million counts of fraudulent mortgage foreclosure documents. Many were guilty of multiple frauds valued in the hundreds of millions. We're talking about organizations that have between them stolen the equivalent of at least 2 million new cars in numerous premeditated and carefully executed schemes. These guys make Al Capone and Pablo Escobar look like a penny-ante operators.
That's something Occupy Wall Street types and the Tea Party types generally agree on: The bankers responsible for these kinds of criminal schemes need to be in jail for the rest of their natural lives.
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But corporations are people, my friend!
Seriously though, corporations are made up of people, and you can divide the people in that organization into about 6 sometimes overlapping categories:
1. The people who came up with the idea of committing the crime. These should be prosecuted under RICO.
2. The people who decided to commit the crime and put resources into doing so. These should be prosecuted fully for whatever crime the organization committed.
3. The people who carried out the effort to commit the crime.
Re:It's about time... (Score:4, Informative)
I'm not sure who Millikan is. Do you mean Milken? He's a free man and also a multi-billionaire.
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I believe Millikan was found guilty of manipulating oil.
He was charged with dividing the Faraday constant by Avagadro's number, but settled out of court for 160 zeptocoulombs.
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Which one is Millikan? Do you mean Milken? He's a free man and a multi-billionaire.
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Whoops, just realized I replied to the wrong level of the thread.
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*cough* yeah.. for stealing paperclips..
Scientific? (Score:2, Insightful)
Vuu, Lu and another former Flow Traders worker, Glen Cressman, all have been charged with unlawful duplication of computer-related material and unauthorized use of secret scientific material.
As one who maintains code for the securities industry, calling it "scientific" is an insult to science.
No Cure for Stupid (Score:2)
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In this case it's the corrupt idiots in the law courts. They are making a huge and very corrupt distortion in terms of copying information. This is basically a copyright infringement as no data was stolen only unpublished programs but still non-unique programs. The distortion is corporations via a corrupt court attempting to twist this into national secrets disclosure. This is a straight up economic and civil court matter not a criminal court matter. Basically the idiots are putting the corporate corruptio
Not copyright laws (Score:2)
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No, not theft involved except maybe a few dollars worth of computer processing time and network traffic. That being all that was taken from and denied to the original owner. Trade secrets, see now that is really just a corporate flim flam, usually used when they are cheating people and trying to hide that cheat from the public when being dragged through the courts. If it is protected it is protected by either copyright or by patent, those are the laws in place, so trade secret is pretty much just bullshit,
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Let me guess, you got your JD at DeVry?
Trade secrets absolutely do have legal status, the same as copyrights and patents.
If you're going to parade your ignorance in public view
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I did not say it did not have a legal interpretation. However it is a direct corruption of the legal system by corporations ie typical trade secret, buy something for ten cents, claim it cost $100 then sell if for $110, that is a legal trade secret including the lie, same as bullshit special ingredients. Certainly not the only thing to legalised on criminalised solely on the base of corruption. Trying reading and understanding for a change.
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No, I made it quite clear, their crime is simple copyright or patent infringement, they did not deny their employer anything. So a civil penalty with the appropriate fine, for making likely several copies. Not some distorted corporate takeover of the courts and criminal system, turning any infringement against them into a felony.
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Re:Charged with upsetting wallstreet, rich people (Score:4, Funny)
Hint: The summary usually has links in it that you can click on that will direct your browser to something called an article. There you can find answers to many of the most bewildering questions that many slashdot "readers" have...
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With the state of modern journalism, you can't necessarily trust the contents of the linked article.
The sent this via Email??? LOL! (Score:5, Interesting)
But it explains why the stole the code: They obviously do not have what it takes to write their own....
Side note: I have worked with some pretty locked down notebooks from jobs at customer-sites, and there was always an easy and untraceable way to export data, and I did not even try hard. Only exception so far is a job my boss did where he was not allowed to remove the computer from a locked room and had to leave all his own electronics outside. Of course I only ever used it to export data that I would be allowed to export anyways (but where that would be painful in the official way), or not at all (stumbled over it by accident, just copied a few freshly created test-files). But basically, if you have access to the physical hardware, can take it home and can boot it up, run software and write simple code (shell-scripts/word macros are quite enough), you have won, no matter how locked down the thing is.
Re:The sent this via Email??? LOL! (Score:5, Insightful)
"They obviously do not have what it takes to write their own...."
You can say this about nearly all programmers, artists, singers, etc. To pretend that your creation is unique means that you have to ignore everything that you've learned in your life up to that point. It's the height of hubris.
Even Einstein based much of his insights on what Maxwell did.
Everything is derivative. The only difference is magnitude.
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BMO
Re:The sent this via Email??? LOL! (Score:5, Funny)
Everything is derivative.
That's certainly true on Wall Street...
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Everything is derivative. The only difference is magnitude.
So your claim, if I have this straight, is that there is no such thing as revolutionary ideas, only evolutionary ones, and that there's always a route from the status quo to the most desirable future, and that route can always be travelled incrementally?
I call BS. I've known engineers who thought this way, and they, without exception, never had a revolutionary idea in their lives. Incrementalism is the refuge of the small mind.
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http://www.woodyboater.com/classic-boat-art/neatness-is-the-refuge-of-the-small-mind/ [woodyboater.com]
I'm pretty sure you just incrementally changed this quote from 2008.
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>never had a revolutionary idea in their lives
Name an invention that was never based on a previous invention.
I'll wait right here.
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BMO
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>never had a revolutionary idea in their lives
Name an invention that was never based on a previous invention.
I'll wait right here.
--
BMO
The Archimedes screw, the earliest known water pump. Leonardo's helicopter, the first attempt at rotary lift flight. Written language. Tesla's invention of radio.
If you want to get more primitive: starting a fire via friction. The wheel. The spear. The stone axe. The scarping tools used by early man to cure hides. The idea of curing hides in the first place. Cheese. Beer. Domestication of animals. The fishing net.
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How do you incrementally get from a horse to a motor car?
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How do you incrementally get from a horse to a motor car?
Well it clearly couldn't have happened through development, so it must have been...
"Intelligent Design" //rimshot
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The steam engine fell out of the sky, did it?
How do you get to oil refining from making hay?
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I don't have time to give you a history lesson right now but here are the basics:
1. Replacing horses with cars may have been a good idea, but the engines were already in use for other purposes.
2. Steam engines were based on pressure cookers.
3. In some parts of the world oil is close enough to the surface that is seeps above the ground for people to notice that it burns.
No one is claiming that there aren't any examples of people making leaps of technology, but they all start out simpler, easier to imagine. R
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How do you get to oil refining from making hay?
Y'know, just because incremental developments are going on along different lines, doesn't mean that you get to point out an early point on one line, compare with a later point on another, and say that there's no link. It's not a matter of 'transportation' being some kind of technology category that gets increased every time someone develops the field; agriculture and chemistry and metallurgy and all other fields are bound together by innumerable tiny interdependencies. Science is not monolithic, and it's
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For you to have a point, it would also be necessary to know engineers who thought the other way and have had a revolutionary idea.
So, any examples (of the revolutionary ideas of your colleagues, that is)?
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Not sure about the stuff you tagged on afterwards about route to future, etc....but if you'd like to propose an example of a truly out-of-nowhere, no-antecedents, Black Swan-class revolutionary *idea*, we're all ears....your thoughts?
Re:The sent this via Email??? LOL! (Score:5, Interesting)
That's because they aren't trying all that hard. I once thought security at a place I worked was lax because of several reason I took to the security director. He then explained to me that security in a corporate sense is not about securing anything. It's about shifting responsibility away from your employer. For example, your company has a large customer contact list. Is this really important or secret data? No. You don't want it just laying about but if it did get swiped it's not that terrible. But you're under legal and civil obligation to "Secure" it. So, instead of going through a multi-million dollar project to protect this data you really don't give a crap about you farm it out to the lowest bidder. Some off-site place that will store it for you. If they screw it up and the data gets stolen, they and their insurer pay up. You blame the event on them. Etc... You're legally and financially off the hook.
For things that we really needed secure, there were locked cages, palm prints, 30 digit passwords and key cards. There was no taking that information off site. Period. Data was encrypted at rest, the OS was a custom build. Not only would you have to decrypt it you'd be working in a strange environment devoid of all sorts of basic utilities that would make your life difficult. You can make things secure. It's just a real pain in the ass to do so.
No its not (Score:2)
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No surprise. The only real trick is to copy the list in a fashion that leaves no proof to prevent legal action. In many financial organization, full emails are kept for a long time exactly for that reason. The idea is that a well-established competitor will _not_ accept these lists if it can be demonstrated that they were stolen, as that could be more expensive to them than not taking the lists. I guess these clowns had never heard about that or were to stupid to realize something like this was in effect.
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Sounds all pretty impressive, but as soon as you allow people to work from home (and that happens a lot), or from the site of a customer (and that happens a lot too), you lose control over the physical device location and then you are screwed and you cannot make things secure anymore. At the very upper end, it is not that difficult to control a keyboard and mouse externally (if external keyboards and mice are allowed, it is trivial), and to screen-grab or film what is on the screen. If you can display it, y
There's a bright side (Score:5, Funny)
Sending yourself pilfered code through your company email account is probably not the wisest plan.
The bright side is the NSA used the code to make enough money to pay for their company picnic this year.
Backups ? (Score:2)
Sending yourself pilfered code through your company email account is probably not the wisest plan.
Depends what your goal is. Now, everyone has backups of that code: NSA, China, Russia... I'm sure these algorithms will perform well when put against each other.
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The NSA will always win due to having the lowest ping times.
Wasn't that how Microsoft got started? (Score:1)
Bill Gates borrowing some code from a small computer company, then starting his own business to sell the OS?
Re:Wasn't that how Microsoft got started? (Score:5, Informative)
No, he actually bought it... at bargain basement prices because he didn't tell Tim Paterson that he had IBM as a customer.
Re:Wasn't that how Microsoft got started? (Score:4, Insightful)
Exploiting the difference between ethical and legal for the betterment of one's hip pocket. The American Corporate Dream.
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I sure do hope you plan on selling your house for no more than what you paid for it. Anything else would be unethical.
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Way to go! You totally decapitated that straw man!
I'm sure when you sell your house you'll be the one that doesn't tell anyone you know there's termites, and you didn't get them treated just to make sure you wouldn't have to.
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I'm not sure why a capital gain is in any way equivalent to a hidden defect. Probably because it isn't, they're two entirely different things.
Both examples are full of bugs though, I'll concede that.
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The difference between ethical and legal is also called the "profit margin".
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The difference between ethical and legal is also called the "profit margin"
Love it. I think I'll drop that into my .sig , and maybe even put it on some of my campaign material.
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Yeah, I think GP was conflating DOS and BASIC.
Re:Wasn't that how Microsoft got started? (Score:5, Insightful)
A small company clean-roomed an existing DOS, and Gates bought that--for $75k [wikipedia.org]. Technically speaking it wasn't arbitrage because it wasn't immediately flipped to IBM and there was some assumed risk that nobody would buy it. OTOH, he definitely bought cheaply in one market and sold dearly in another--one of the greatest trades of all time.
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They got their start writing a Basic interpreter for the MITS Altair. Bill and Paul had access to a PDP-10 at school. And their Basic looks a lot like the Basic I remember from my PDP days.
And then Bill got on his high horse about people stealing 'his' Basic.
Sounds like a company I worked for.... (Score:5, Interesting)
The place I used to work for was re-engineering the C++ Source code of their biggest client, rewriting it into Java, and calling it their own... It was basically an improved rip off of the customer's system, that the customer had paid them to develop in the first place. In my view, they where stealing their own best customer's intellectual property.
When I found out about it I asked "Can you legally DO that?" They insisted that it was fine... I didn't last 3 more months there and ended up quitting in the midst of a huge office blowup. I should have known a lot sooner it would not end well. Had I quit sooner I might have not needed to hire a lawyer to defend myself from their lawsuit against me. (Which they didn't win.) They eventually went into business that competed directly with their customer.
Some people have no ethics or morals. Many don't get caught, some do. Where I was able to prove they broke the law in their dealings with me, they never got caught by their best customer to my knowledge. I'm just LUCKY not to work there anymore. Those guys where NOT people you want to work for...
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"The place I used to work for was re-engineering the C++ Source code of their biggest client, rewriting it into Java, and calling it their own..."
Basically what every SBA company does daily. Every SBA company... and typically copying from paid [by us tax payers] gov't work.
I remember working for a Chap11 company that basically took code from it's former self (chap 11 several times!), which originally came from some Wall Street Firm--messaging algorithms used for trades we were rewriting it for use in cellph
Most trading firm code is open source ripped (Score:5, Interesting)
The problem is that most trading firm code is actually Open Source software that was ripped off in the first place.
Proprietary? Um, no.
Never believe an exec at a trading firm. Ever.
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Oh just go read the Vanity Fair issue on the newstands and stop whining.
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It's not my job to link to something already IN PRINT and ON NEWSTANDS.
I made no such contract with you to do so.
Failure on your part to be aware of commonly known information that has been discussed by many tech people worldwide is not my problem.
Please put this in the file with the notes from your professors asking you to stop whining so much.
Especially when you're an AC.
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Try vanityfair.com since you obviously have no idea what's going on.
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Again, not my problem you can't read. Go get a real job.
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I have one, where when we try to bring a point forward we use evidence to back it up.
I see, and you do so anonymously? Riiiiiiiight.
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We have key cards and everything. It's quite neat. You should try that "job" thing sometimes.
How old school. We use level 8 biometrics in our ID labs. And then remotely control our colleagues nervous systems.
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What do you expect from one of the top research universities in the world? We solve real problems, and create new switching devices for networks, not patch together spaghetti code, or parse the human or mosquito genome using game theory.
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The problem is that most trading firm code is actually Open Source software that was ripped off in the first place.
Proprietary? Um, no.
Never believe an exec at a trading firm. Ever.
How is USING Open Source software with your own modifications 'ripping it off'?
That is the ENTIRE G.D. POINT OF GIVING THE SOURCE AWAY.
Personally I think it's a stretch to say publishing modifications in binary form takes anything away from anyone since they still have the same source you started from... However, "use as-is or share" runs 100% counter to OSS principles of freedom, you are absolutely not taking anything away from anyone, and your use restriction is just evil.
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How is USING Open Source software with your own modifications 'ripping it off'?
That is the ENTIRE G.D. POINT OF GIVING THE SOURCE AWAY.
That depends on how it's licenced. Some people don't want companies profiting off of their code, and there are licences that prohibit that.
Others just want, if their code is used for-profit, to get a cut of those profits, and there are licences for that.
And some people don't care who uses it, or if it's sold for a profit, they just want to share it with others, and not loose the right to use their own code. (The entire reason for the "Open Source", "GNU" and "Copy-Left" type movements: Companies were taking
How can it be ripped off? (Score:2)
If the software is GPL, you're perfectly free to modify and use it privately - it's only when you distribute the software that you have an obligation to also distribute the source code. BSD and similar licenses have no restrictions whatsoever, so you can use them how you like.
AFAIK, you retain copyright on the delta changes from the original software too.
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But this does not mean you get to strip off the original code declarations. That is, quite frankly, theft.
Remember? (Score:2)
I'm shocked! Shocked, I tell you! (Score:4, Funny)
There are Wall Street traders that are unethical?
This is kind of like... (Score:3)
2 groups of drug dealers shooting each other in the street and taking each other out. As long as no one else gets caught in the crossfire, I'm OK with it.
Bogus Charges (Score:1)
There is no software available to game the system. However if they stole software that would help them connect and set up a trading service that would compete with others then you'll see stuff like this start to fly. Wall Street hates competition and know how to toss false allegations to rile up the mobs. The ignorant mobs getting all indignant are the slashdotters here. Don't let wall street frame a couple of people so easily. Ask what it was they emailed and if they can't tell you then treat it like the B
Those guys.... (Score:2)
will steal ANYTHING from anybody.
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Wishing I had points to give!
on e-mail (Score:2)
"Sending yourself pilfered code through your company email account is probably not the wisest plan."
apparently sending ANYTHING through e-mail period is not the wisest plan, either.
Where I worked once.... (Score:1)
I worked at a place where they fired the developer who had written most of the code that was running the company. They let him go back to his desk to clear his stuff and he then decided to also start uploading the full code base to his personal home server. He had an arch enemy developer who noticed the traffic and busted him on it. The owners called the cops who showed up and made him delete the code with his arch enemy looking over his shoulder. He wasn't all in the wrong as the owners had promised him a
So what? (Score:2)
Ah, I see, because it's about the "Wall street". A sure way to get plenty of attention on
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A person steals employer's source code to seed it's own startup. Happens all the time. Why is this a news?
1) They got caught. /. readers.
2) They are getting prosecuted.
3) (It get's attention HERE because) Coders are a significant fraction of
4) It WAS both illegal and immoral don'tchaknow. (And unethical to boot!) Some misguided people care about things like that. They are called "Suckers"... I mean, "Not Sociopaths".
Ah, I see, because it's about the "Wall street". A sure way to get plenty of attention on /.
5) Well, I suppose there are still a few people a smidge upset over the 2009 crash. You know, blaming Wall Street gamblers and big banks for the loss of jobs, life-styles, and life-savings. (While t
Ob (Score:2)
Unless you encrypt it.
# to do: perl joke goes here
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yes, if you encrypt it you will be perfectly fine. perfectly fine.
I am surprised (Score:1)
...that this is a criminal and not a civil case.
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I've heard of this sort of thing before. (Score:1)
Back in the dot com boom, a friend told me about a company he had worked for that built up a number of software products that represented the company's intellectual property. When the dot com went bust the company went bankrupt. When the writing was on the wall, the management of the company formed another company and bought up the best of the IP. Then they started again.
No, it's not right. The Investors should be the owners of the property or at least compensated rather than managers sneaking in and
Futile attempt (Score:1)