Seton Hall Law Alumni Defense Team Prevails in ‘Flash Boys’ Case
A controversial conviction is overturned in the New York Supreme Court, with Kevin Marino ’84 representing high frequency trading programmer Sergey Aleynikov
Bringing to an end a high-profile criminal prosecution, the New York State Supreme Court overturned the conviction of Sergey Aleynikov, a former programmer for Goldman Sachs accused of stealing confidential computer code when he left the firm for a new job in 2009. Standing at Aleynikov’s side was his attorney – Kevin Marino, Seton Hall Law Class of 1984 and the team of law firm Marino, Tortorella and Boyle. (Pictured, from left, are John Boyle '00, Sergey Aleynikov, Kevin Marino '84 and John Tortorella '99. Photo credit: Matthew Goldstein/The New York Times/Redux)
Propelled to national attention by the best-selling Michael Lewis book, Flash Boys, the case is, in Marino’s view, “a civil dispute masquerading as a criminal case.” Aleynikov was arrested and subsequently tried and found guilty under U.S. espionage laws when he downloaded portions of the trading code after he left Goldman Sachs to join a hedge fund. He was sentenced to eight years in prison, and served nearly a year before his conviction was overturned from the bench by a federal appeals court in 2012. Despite that decision, the Manhattan District Attorney obtained an indictment on state law grounds, leading to the state Supreme Court decision.
High-frequency trading relies on computers to conduct complex transactions, capitalizing on slight market shifts across multiple markets to yield lucrative returns for investors. Much depends on the quality of the coding algorithms and therefore, on the talent of the programmer.
Aleynikov does not dispute violating Goldman Sachs’s confidentiality policy when he downloaded source code from the company’s computers. However, Marino argued that the code was non-proprietary and open source and that Aleynikov had no intention of exploiting it for profit or for criminal purposes. Meanwhile, Goldman Sachs asserted that the code was so powerful, “in the wrong hands the computer code could harm financial markets,” according to a 2012 Forbes article.
State Supreme Court Justice Daniel Conviser, who ruled on the case on July 6, determined that the prosecution did not prove that Aleynikov stole "secret scientific material,” quoting from the section of the 1967 law on which Aleynikov’s original conviction was based – a law that has been labeled both obscure and archaic. Justice Conviser also ruled that prosecutors did not prove that Aleynikov make a “tangible reproduction” of the code.
In a statement to the media, Marino said, “Almost everyone who finds themselves in the crosshairs of the American criminal justice system in 2015 lacks the ability or will or both to wage this kind of battle against the forces of government. Mr. Aleynikov had the will, his lawyers had the ability, and here we are.”
Marino concluded, "Today's decision is a resounding vindication of the American system of government. Sergey Aleynikov placed his faith in that system, and it has been rewarded."Read the Coverage:
New York Times: Conviction of Former Goldman Sachs Programmer Is Overturned
New York Post: Judge tosses conviction of ex-Goldman programmer