Chicago Man Sentenced for Theft of Trade Secrets in High-Frequency Computer Code Theft
The former employee of a Chicago startup firm was sentenced to eight years in prison for stealing secret computer code used in a Wall Street bank's high-frequency trading system, the Chicago Tribune reported.
Intellectual property lawyers in Chicago understand that computer programs and other trade secrets are among a firm's most valuable assets. Protecting those assets is often critical to maintaining a company's competitive advantage, or even its survival. Establishing non-compete and/or confidentiality agreements in Illinois is one way to help ensure the protection of a business' intellectual property.
In this case the 41-year-old defendant was a former computer programmer at Goldman Sachs Group Inc. before taking a job at Teza Technologies LLC, a high-frequency trading startup in Chicago. He was convicted of theft of trade secrets and transporting stolen property across state lines. The verdict came following a two-week trial in federal court in Manhattan.
The defendant was sentenced to 97 months in prison and fined 12,500. The sentence was within the 8 to 10 year range recommended by the government. The theft involved the transfer of 500,000 lines of code to an outside server.
High-frequency trading companies utilize computer-driven trading to trade shares in milliseconds with a goal of capitalizing on minute changes in stock prices, often just a fraction of a cent. The computer code upon which such systems run are closely guarded secrets.
The case is USA v Aleynikov, U.S. District Court for the Southern District of New York, No. 10-00096.
Previously, the law required a company to prove they had no presence in the state before they could be exempted from charging customers sales tax. The new law, dubbed the Main Street Fairness Act, requires online retailers to collect and remit sales tax on purchases made by Illinois residents if the retailer has a physical presence in the state. The definition of "physical presence" has been expanded to include affiliated companies. Meanwhile, the average sales tax nationwide jumped to 9.64 percent in 2010 -- up more than a full percentage point from the 8.63 collected in 2009. Brick-and-mortar businesses have long complained that the ability to make sales without charging sales tax gives online retailers a 5 to 10 percent advantage. 
