Sergey Aleynikov Almost Found The Right Man To Tell His Tale

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Unfortunately, the Aleynikov apparently didn’t quite measure up to be Michael Lewis’ muse, and so the world got Flash Boys.

In 2009, he received a call from an old contact, a lawyer, who said he had a client Lewis might be interested in writing about. This was Sergey Aleynikov, the former Goldman Sachs programmer arrested by the FBI and ultimately jailed for "stealing code" from the bank. "It's an incredible story," says Lewis, "and I said yeah, yeah, yeah and ignored him for a year and a half." During that time, he mulled over what could be so valuable as to justify what looked, from the outside, like an extraordinary overreaction on the part of Goldman Sachs.

"I didn't understand the code – what had he taken? It was very fishy, the way Goldman Sachs reacted to it. No matter how valuable it was, calling the FBI was a really extreme thing to do. And to do it so quickly. And it was pretty clear from the newspaper descriptions that no one understood what he'd taken." Lewis spoke to a few investors, started looking into high-frequency trading, and was ultimately told about someone who would go on to motor his whole story, Brad Katsuyama, or as he was described to Lewis at the time: "There's this one guy who works for the Royal Bank of Canada."

And in related-ish news:

"I find this story really upsetting," he says over lunch in LA, where his publicity tour just ended. "The idea that the smartest, richest elites of society find this an acceptable activity. This predatory activity…."

Not all of it has been positive. Prominent in reviews of the book has been the critique that Lewis has created a false set of heroes and – particularly from financial journalists – that none of this stuff is new in the first place.

"And that's a ton of horseshit, because I've watched Katsuyama educate the world. It's his story. His knowledge starts in '08. And if you knew this already, why didn't you do something about it?..."

The accident of his career is, he says, that he has been so well-placed to document an industry "that has gone insane. The financial markets have generated this fantastic material. I don't think anything else like this will walk in my door."

Michael Lewis: ‘Wall Street has gone insane’ [Guardian]


Sergey Aleynikov Is Dancing Again

One thing that I may have mentioned here is that, before I was lured to the blogging industry by the outrageous lucre on offer, I worked at this little establishment called Goldman Sachs. One thing that I probably haven't told you, but that I've mentioned to a few friends and co-workers, is that due to some frankly inexplicable confusion, the time between my telling people "I am leaving to go work for Dealbreaker" and my being escorted out of the building by active-duty Navy SEALS was somewhat longer than you might expect (viz. several nanoseconds). One thing that I've never told anybody, so let's keep it between us, is that I made good use of the delay to download certain files to a flash drive. I won't discuss all the details, since I'm using some of those files to set up my own high-frequency insider trading fund, but I will mention that with the right codes the voice recorders in the GS elevators can be accessed remotely.* One reason I never told anyone about this before is that Goldman takes it badly when people take stuff with them on the way out, and has a tendency to react by having them imprisoned for the better part of a decade. After today, though, it looks like I'm good to go:

Sergey Aleynikov Came Thisclose To Spending The Next Eight Years In Jail

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: