Star bank holding firm Goldman Sachs has been getting its fair share of antipathy this month. First it was Rolling Stone's polemic against  the bank; then it was BusinessWeek's sobering review of how the 140-year-old firm will be profiting from the government-approved scuttling of its major rival, Lehman Brothers, and profiting despite the recession. (While the BW article , written by David Henry, stops short of recriminations, simply profiling how GS has added $36 billion in market value since March can't help but make the firm sound duplicitous.)
Now the company is in the news again, this time after a former employee stole and disseminated "computer codes and trading-related files" from the bank that were key to its trading intellectual property (GS headquarters at 85 Broadway in New York seen above).
The company's computer platform, says Reuters, is built on top-secret mathematical formulas, many of which are used to make precise, profitable automated trades. With their system's proprietary guts compromised, Goldman stands to lose the edge that has made it infamous on the Street. And that is a very, very expensive problem.
The accused, Russian immigrant Sergey Aleynikov, allegedly uploaded the files to a German Web site and will face federal charges. He was apprehended by the FBI at Newark LibertyAirport on July 3rd, after he had just started a new job with a competing firm in Chicago. The computer programmer left GS in June after a two-year run developing Goldman's "distributed real-time co-located high-frequency trading platform," for which he was paid an annual salary of $400,000. He will likely be charged with industrial espionage.
[Via Reuters ]