Saturday, July 18, 2009

Hacking Wallstreet

many big investing companies such as Goldman Sachs use computer programs to buy and sell stocks and commodities. These programs agergate data (such as the news) to know when is the best time to buy and sell. This allows them to be a head of the average investor.

Goldman Sachs has the best of these programs and they use it to buy stocks a few milliseconds after news that will make the stock go up hits and sell as soon as their is an up tick in the stock.

it seems that a former employee of Goldman Sachs named Serge Aleynikov (who maybe the same Serge Aleynikov in this linkedin page) stole the code.

well at first Serge Aleynikov says it was an accident and he was only downloading open source information but it seems that he tried to erase his trail by deleting his bach files but he didn't realize Goldman sachs saves that information.

though Serge Aleynikov did send the info he retained German website, owned by a person in London. That plus his Russian background leads some to think that was a plot of international espionage and some fear that people could use this program to manipulate the market (of course I'm not sure why one should feel much safer knowing a company can manipulate the market vs people in a different country)

Serge Aleynikov also has had history of IP violation in the past including a case in 1997
Aleynikov Pacer

after leaving Goldman Sachs Serge Aleynikov went to work for Teza Technologies, LLC, in Chicago. They paid him 3 times what he made at Goldman Sachs. It's easy to wonder if they have any part in this or was Serge Aleynikov just looking for the next company to work for and maybe still sensitive information from.

recently Serge Aleynikov has been released on bond. but I don't think he is no longer dancing (like he was with wife in this video...both enjoy ballroom dancing)

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