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Court Made Its Point Freeing One HFT Code Thief. The Rest Can Rot In Jail.

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Samarth Agrawal once left a bank, but took its high-frequency trading code with him to show to a would-be employer. It occurred to him, moldering away in a prison cell—because he basically admitted everything on the witness stand at the end of his trial—awaiting his eventual deportation, that his story sounded an awful lot like that of Sergey Aleynikov, who also once left a bank with some high-frequency trading code on hand. And since the U.S. Second Circuit Court of Appeals last year was so kind as to release Mr. Aleynikov (for now!) from prison on the grounds that a bank's policies are not the same as federal law, he thought they might like to do the same for him.

Unfortunately for Mr. Agrawal, the court was not feeling as generous this year.

The 2nd U.S. Circuit Court of Appeals rejected Agrawal's contention that the theft did not qualify as a crime under the federal laws under which he was charged….

Agrawal had contended that his case was similar to that of former Goldman Sachs Group Inc programmer Sergey Aleynikov, whose federal conviction for stealing that bank's code was thrown out by the 2nd Circuit in February 2012.

Aleynikov was later charged with violating state law by the Manhattan district attorney's office.

Court upholds ex-SocGen trader's code theft conviction [Reuters]


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One of my favorite recent acts of journalism is the Journal's amazing series about how everything you could possibly do is a federal crime, which is both a true fact with serious policy implications and also an important thing for you to remember if you want to stay out of federal prison, which I do; you may disagree but you are wrong. Here's a pro tip though that you will not (yet) find in the Journal series: there is a decent chance that reading Dealbreaker is a federal crime where you are. The reason for that is that there is a federal statute that says that if (1) there is a computer and (2) someone tells you not to do a thing on it and (3) you do that thing on that computer, then (4) PRISON! And if you work in finance then (1) yes, (2) maybe?,* (3) yes, and (4) no but it could happen. An important qualifier to that is: as of yesterday, if you're in California, feel free to read Dealbreaker from your work computer. Hell, go nuts, check Facebook. That's what a Federal appellate court ruled yesterday, finding against the government, who were prosecuting a guy named David Nosal for violating his employer's computer use policy. Here's how the court characterized what the government wanted:

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By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

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