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Vance Can Proceed to Trial Against Former Goldman Sachs Programmer

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By Robyn Hagan Cain on May 02, 2013 6:53 AM

If contemplating code theft at your company keeps you awake at night, there's news in the Goldman Sachs code theft case that may help you sleep.

Former Goldman Sachs Group Inc. computer programmer Sergey Aleynikov can be charged under New York law for stealing code from the global finance giant, Reuters reports.

You may remember that Aleynikov was convicted under the Economic Espionage Act (EEA) in 2010 of stealing trade secrets from Goldman Sachs. On appeal, Aleynikov argued that the Goldman Sachs source code at the center of the case was not a "stolen good" within the meaning of the National Stolen Property Act (NSPA), and that it was not related to a product "produced for or placed in interstate or foreign commerce" within the meaning of the EEA.

The Second Circuit Court of Appeals reversed Aleynikov's source code theft conviction, noting that the code was "highly valuable," but "not designed to enter or pass in commerce, or to make something that does." That means it wasn't covered by the EEA.

The federal appellate court also concluded that Aleynikov didn't violate the NSPA because he "stole purely intangible property embodied in a purely intangible format." (Aleynikov transported portions of the source code to Chicago on his own laptop and flash drive; thus, his actions failed to satisfy the NSPA's tangibility requirement.)

After the Second Circuit ruled for Aleynikov, Manhattan District Attorney Cyrus Vance Jr. charged Aleynikov with stealing secret trading code under New York state law, The New York Times reports. Aleynikov challenged the charges, asserting double jeopardy.

This week, New York State Supreme Court Justice Ronald Zweibel ruled that Aleynikov was not deprived of his Fifth Amendment right because the federal and state charges were different, and the federal case was dismissed based on an inadequate indictment, rather than a lack of evidence, Reuters reports.

Goldman Sachs may have been peeved when the federal charges against Aleynikov were dropped, but the company could still have the last laugh thanks to the Manhattan D.A.'s commitment to prosecuting computer crime and corporate espionage cases.

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