Actually, it was Assistant U.S. Attorney Joseph Facciponti versus Sergey Aleynikov, the former Goldman Sachs computer programmer, who left the investment bank for a rival and allegedly stole confidential source code for Goldman's high-frequency trading platform. 

In his opening statement, Mr. Facciponti said Sergey Aleynikov located a computer server in Germany that wasn't blocked by Goldman's firewalls and secretly uploaded portions of the code in the days before he left the investment bank.  Mr. Aleynikov sought to use the code to build a similar trading platform at Teza Technologies LLC, Mr. Facciponti said.  "The defendant thought that he had found a fool proof way of getting around the security barriers."

Kevin Marino, Mr. Aleynikov's lawyer, said his client only was trying to download "open source" code that was used on the trading platform and wasn't owned by Goldman or anyone else.  Mr. Marino added that Mr. Aleynikov may have violated Goldman's confidentiality policy, but he didn't commit a crime.

The trial, which is being heard in U.S. District Court in Manhattan, could take two to three weeks. 

    Wall Street Journal:  The Prosecutor's Account.   Mr. Aleynikov, 40, has been charged with theft of trade secrets and transportation of stolen property.  He faces up to 10 years in prison if convicted on the most serious charge of theft of trade secrets. 

The prosecutor said Mr. Aleynikov had considered leaving Goldman in 2008 when he received a job offer from UBS AG. He stayed after Goldman agreed to pay him $400K a year, making him one of the highest paid programmers at the investment bank.  The next year, he again considered leaving the bank, this time for Teza, with a pay package that would include a $300K base salary, a $700K guaranteed bonus and profit-sharing valued at $150K.  This led Mr. Aleynikov to devise a system to get around Goldman's security procedures, including writing a computer program that would download thousands of files and hundreds of thousands of lines of source code.

He downloaded additional portions of the code on his last day at work in June 2009 and tried to cover his tracks by deleting files that would show what he had done.  Mr. Aleynikov then went to have drinks with his supervisor and co-workers to celebrate his last day. 

Mr. Aleynikov was arrested at Newark Liberty International Airport on 7/3/09, after returning from a meeting in Chicago with Teza.  He had a laptop and a flash drive, which included portions of the source code, with him at the time.

Mr. Facciponti said Mr. Aleynikov admitted to federal agents at the time that he intended only to upload open source code from Goldman and any upload of proprietary code was inadvertent.  The prosecutor also said that Mr. Aleynikov, after making "cosmetic changes," uploaded some of the code to Teza's systems and "passed it off as his own work," a contention disputed by Teza and Mr. Aleynikov's lawyer.

    Statement From Defense.   Tuesday, Chris Gair, a lawyer for Teza, said that Teza never asked Mr. Aleynikov or anyone else for code belonging to any other firm and didn't have "the slightest interest in such code."

"To the contrary, Teza affirmatively prohibited employees from bringing in or using any such code in their employment agreements," Mr. Gair said. "In addition, the evidence is going to show that Teza had no hint that Aleynikov had taken any code from Goldman or that he was uploading any stolen code. Period."

In his opening statement, Mr. Marino, Mr. Aleynikov's lawyer, said Mr. Aleynikov had no intention of trying to harm Goldman or steal proprietary information from the investment bank. 

Mr. Aleynikov, a U.S. citizen who came to this country from Russia in 1990, made a "mistake" in trying to download open-source code from Goldman, but made no efforts to sell the information he took and didn't share it with Teza. He said the case should be heard as a civil dispute, rather than a criminal one.

"A mistake? Absolutely," Mr. Marino said. "Regrettable? It's pretty regrettable, but it's not a federal crime."

Mr. Marino said Goldman has a broad confidentiality policy, in which it claims open-source code in its system belongs to the company. Also, Mr. Aleynikov's contract with Teza prohibited him from using any other firm's proprietary code, Mr. Marino said.

Mr. Marino said Mr. Aleynikov has been an active member of the open-source code programming community, which believes such nonproprietary computer code should be shared with the world.  

[WSJournal, 11/30]