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Conviction of Former Goldman Programmer is Overturned

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Conviction of Former Goldman Programmer is Overturned

Sergey Aleynikov, center, with his lawyer Kevin Marino outside a courthouse in New York, April 23, 2015 (Sam Hodgson/The New York Times)


A court has again overturned the conviction of Sergey Aleynikov, the former Goldman Sachs programmer charged with stealing some of the confidential computer code for the Wall Street bank's high-speed trading program.

The ruling handed down Monday by Justice Daniel P. Conviser of the state Supreme Court in Manhattan sets the stage for state prosecutors to either appeal the decision or let Aleynikov's six-year legal odyssey through the federal and state court systems in New York come to an end.

"It feels great," said Aleynikov, who wore a striped tie and white shirt in the courtroom.

Conviser said he did not find sufficient legal evidence to support the jury's conviction of Aleynikov on a single charge of unlawful use of secret scientific material, a criminal statute that predates the digital age and includes some phrases and terminology that seemed to baffle both the jurors and judge at times.

"The court holds that viewing the evidence in a light most favorable to the people, the prosecution did not prove the defendant made a 'tangible reproduction or representation' of secret scientific material," the judge said.

On May 1, a 10-person jury convicted Aleynikov after more than a week of deliberation that was interrupted by the dismissal of two feuding jurors. The jury had wrestled with the case, asking for numerous readbacks of testimony and explanation of the terminology of phrases in the criminal statutes that Aleynikov was charged with violating.

In the end, the jury's verdict was seen as something of a compromise: convicting on one count of unlawful use of secret scientific material, acquitting on a charge of unlawful duplication of computer-related material and finally deadlocking on a third count that involved the same law it had convicted him of violating.

The decision by Conviser to dismiss the conviction was not all that surprising given doubts he had voiced about the strength of the prosecution's case during legal arguments that took place outside the presence of the jury. There was considerable debate during those arguments as to whether Aleynikov made a "tangible" copy of Goldman's high-frequency trading source code when he downloaded portions of it onto his computer before leaving the Wall Street firm for a new job.

A conviction on a charge of unlawful use of secret scientific material required prosecutors to prove that Aleynikov made a "tangible" reproduction of the files he had downloaded.

"The court holds that viewing the evidence in a light most favorable to the people, the prosecution did not prove the defendant made a 'tangible reproduction or representation' of secret scientific material," the judge said.

Aleynikov, a 45-year-old former Goldman software programmer who was born in Russia and is now a U.S. citizen, was first arrested July 3, 2009. His first conviction on federal charges was overturned in 2012 by a U.S. appeals court, which ruled that federal prosecutors in the case had misapplied the corporate espionage laws against him.

The appellate court ordered Aleynikov, who had served one year of an eight-year prison sentence, freed from custody and vacated his conviction. Congress would later amend the Economic Espionage Act of 1996, the law Aleynikov had been charged with violating, to fix the problems identified by the appellate court. But that appellate ruling did not mean the end of Aleynikov's legal troubles.

Eight months after the federal appeals court issued its ruling, Aleynikov was arrested again and this time charged with violating two state laws. The move by Cyrus R. Vance Jr., the Manhattan district attorney, drew an outcry from defense lawyers and critics who said the new charges were prosecutorial overkill.

Now it will be up to Vance to decide whether to appeal the ruling or let it stand and perhaps lobby the New York Legislature to amend the law - similar to what happened after Aleynikov's federal conviction was thrown out.

© 2015 New York Times News Service



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