Editor’s Note: The following is a guest post by John Carney.
The former Societe Generale trader arrested yesterday on charges of stealing Soc Gen’s computer code for high-frequency trading was set to begin work this week at Tower Research Capital, a New York based quantitative hedge fund, according to a source.
Samarth Agrawal was charged yesterday with one count of theft of trade secrets, according to Bloomberg. Federal prosecutors said he made copies of the code behind Soc Gen’s proprietary trading last summer.
Agrawal resigned in November, just seven months after he was promoted to be a trader at Soc Gen. He had worked as a quantitative analyst for the bank’s high frequency trading group since 2007, according to reports.
A source familiar with the matter has exclusively told DealBreaker that Agrawal was scheduled to start at Tower Research Capital this past Monday.
“I guess he found a home for his stolen code,” the source said.
Tower Research Capital was founded by two former Credit Suisse traders in 1998, according to a Bloomberg profile from 2007. The firm uses complex computer algorithms to looks for small discrepancies from statistically predictable patters in financial markets. The computers then make bets that the discrepancy will be resolved in favor the typical pattern. Humanity is superfluous to the process, once the code is written by engineers. In 2000, the firm decided that it could not find brokers who could execute its trades fast enough—so it formed its own high frequency trading company, Lime Brokerage.
Around the same time Lime Brokerage was formed, the company also built LimeWire—a file sharing system that the recording industry claimed in a lawsuit filed in 2006 is a tool for music piracy. So the accused code thief was going to work for people who built a file sharing system accused of enabling theft of intellectual property.
No one alleges that Tower knew Agarwal had allegedly stolen code from Soc Gen. This is the second case brought by federal prosecutors involving the theft of quantitative code from an investment bank. A former Goldman quant was charged with stealing code a few months back.
Tower Research would not comment for this story. Steven Statsinger, Agrawal’s attorney, did not immediately return a call seeking comment.
Update: A spokeswoman for Tower responds:
On Monday, April 19, Tower Research Capital LLC learned that Mr. Samarth Agrawal was taken into federal custody and charged by the U.S. with stealing computer codes from Societe Generale. Tower had previously extended an offer of employment to Mr. Agrawal, but he never commenced his employment with us. We are shocked by the news of Mr. Agrawal’s arrest and are cooperating with the authorities on the matter.
Tower believes strongly in the proprietary rights of third parties, including our competitors, and we take steps to assure that our employees abide by those rights. In hiring, Tower chooses individuals based on their experience, knowledge and background, with no intent of accessing the proprietary knowledge they may have acquired from previous employers.
Samarth, Raj, Vikram, Rajat,
I knew my facebook group would work and get Carney back on dealbreaker
Over/Under on Muffie’s return?
I AM THE REAL NAPSTER
Carney back on Dealbreaker?? What’s next, Blodgett back in jail?
don blarney, how we’ve missed you.
like my johnson, the list of people who tried to replace you is long and distinguished.
welcome back.
Will Dealbreaker be reinstituting its coverage of the Asian rice markets?
Welcome back Carney.
Aren’t these the guys who just got sued over hiring some other guy?
John, they let you back in the alliance?
John Carney,
yeah baby!
Nice to have you back John. A return to the good old days!
Is John Carney being hired an economic indicator?
Tower Research is the same group that walked away from a 70MM liability in the PJM FTR markets in 2008. Doesn’t surprise me that they would be involved in trying to steal code from one of the banks.
@1 LMAO!!!
Carney is to Dealbreak as El-Erian is to PIMCO
||
Carney is to Clusterstock as El-Erian is to the Harvard Endowment
I am the CEO of a Hedge Fund
What is “John Carney”?
Not the first problem Tower Research Capital has had like this.
http://blogs.forbes.com/docket/2010/03/23/high-frequency-trading-rivals-in-suit-over-hiring-of-astrophysicist/
I am the janitor of a hedge fund.
How do I wipe my ass: http://www.chicagobreakingnews.com/2010/04/man-charged-after-mailing-in-stained-parking-ticket.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+ChicagoBreakingNews+(Chicago+Breaking+News)
Please Please tell us Carney is back full time and we don’t have to go through the pain of reading Kouwe for one more day
If I had know how much money I could have swiped as a quant I would have stayed in school and gone to MIT.
~Common Thief
At least he didn’t have to port alpha. Why should anyone have to port alpha?
~Alleged San Diego County Employees Retirement Association Risk Manager
I need recent photos of Samart Agrawal, Fabrice Tourre and Jerome Kerviel.
John Carney? Oh, what a cute name…
-A.Dupre
To paraphrase Proudhon, intellectual property is theft.
Tower Research?
Maybe after his time in the can, he might qualify for a job selling CDs at Tower Records. Samarth Agrawal…WTF kind of name is that, anyway?
The Guy from Delaware
“We are shocked by the news of Mr. Agrawal’s arrest and are cooperating with the authorities on the matter. ”
Captain Louie Renault
To the people who enjoy requesting the “over/under” on specific events on these comment boards…you sound like 22 year-olds who just discovered gambling. knock it off, its obnoxious, you aren’t cool.
to the ‘tards asking “john carney back at dealbreaker???”– learn to read, geniuses.
“The following is a guest post”
Get a job Carney, and not here please.
LON VARNEY WRITING on DEALBREAKER MEANS THE MARKET’S REACHED ITS PEAK!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Regardless, so good to see the bastard on these pages.
“Get a job Carney, and not here please.”
seconded
Does this mean that EP will be coming back? I miss Muffie.
@32 no, and it also doesn’t mean carney is coming back ya dumb fuck. (‘this is GUEST post’).
@33 who scraped YOUR cunt on the sidewalk this evening, ya dumb fuck.
Sam, Sama, Samar, Samar not going to be working here anymore.
“We are shocked!!!!” teehee. Looks like someone is lying.
@ 36 Shocked that he got arrested for it cuz they didnt know the fuzz was listenin
Who the hell is Jon Carney? Does he have small fingers?
I don’t know where to begin. @1, well played. @5, that was good. @6, “walter, he’s gonna cut off my fucking johnson!”
Donkey Punch FTW! 32 – do your lips hang low enough to scrap on the sidewalk?
Carney – its good to have you back ya miserable son of a bitch. Toss Zacky out on his testicles and pick up where you left off – only now you report to Bess. It’s better this way.
I miss Muffie too. And EP, if you read this, if you aren’t too busy, how about a post or two at FR?
@19 Is it a sign of the general education level our of our country that the posters after said article seem to think you can do DNA tests on excrement? Do they think we have DNA in our shit?
Over/under on #27 being 23 y/o?
EP, are you still DJing collateral or are you back in the game?
John, if you are willing to be a second fiddle to Ms. BL, you’re welcome. Swear on HAM’s johnson.
AFAIK, he was working for Tower for a while unofficially from their other office accessing and coding on their servers. Seems like Tower got the strategy and then gave in the guy.
@44AFAIK, he was working for Tower for a while unofficially from their other office accessing and coding on their servers. Seems like Tower got the strategy and then gave in the guy…
I wonder if they gonna be “shocked” when that becomes fact.
nice going mr mark gorton @tower, this is how u use your NPO called TOPP. hide people in their non-compete period to steal their strategy!