Goldman Spy Scandal: Trading Secrets Reportedly Stolen By Former Employee

Did someone try to steal Goldman Sachs' secret sauce?

While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution that sources say is none other than Goldman Sachs.

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Comments

[anshumanmishra]

This is good news. Goldman's been moving the market pretty much on its own the last few days. Those interested might want to check out NYSE's Supplementary Liquidity Provider program. I guess most of us will not be surprised by which securities firm-turned-bank is first in the program trading rankings.

Goldman's program trading has led to unprecedented levels of volatility in the last segment of the NYSE regular trading hours. This has impacted daily volatility, causing ripple effects on derivatives valuations.

To sum up, Goldman's been trading in a commodity (market volatility) over whose production (via the NYSE SLP) and distribution it has total control. It's a nice cushy game, but it wouldn't have lasted. Monopolies tend to be shaken from within. Remember Klaus Fuchs.

[ManyColored]

This is great! A bank that manipulates the market with its software is now "worried" that whoever has access to the stolen software can now manipulate the market in "unfair ways"! This is an example of a burglar complaining that someone has stolen his tools. What the hell was the BANK doing?? What they're worried about is that someone else will make money the same way they have been cheating. Why do you think we are in this economic mess?? It's because of the robber baron banks like Goldman Sachs clobbering the public with their fraudulent ways.

[JBS]

A falling out amongst thieves.

[zukervati]

Yeah, the "secret sauce" called bribery!

[not going2take it]

Hopefully Goldman Sachs thieves are polishing the Brass
on the fixtures of the bathrooms, because (hopefully)
this rat infested ship is going down.

These people have got to pay . . . we surely have!

[PhilipTaylor]

Obama and Holder could simply arrest G0LDMAN and the others for "Manufactured Insider Trading!"

Others for Misrepresenting products as LOW RISK "AAA" when they were HIGH RISK!

These are both Fraud Charges that are on the Books and many will qualify as Felony Charges.

These LAWS could be enforced Today or Tomorrow!

Chef Martha paid for something far less Catastrophic and Calculated!

[fifty8]

What was their incentive in purchasing Credit Default Swaps

Put simply, (Credit Default Swaps) were a bet in which the die was loaded in favour of the gambler, or counterparty. They were betting on the failure of bad loans which were purchased and then re-packaged into (Collateralised Debt Obligations)and then sold on! For those in on the scam there was simply no reason to buy Credit Default Swaps unless they were confident that the sub-prime market would collapse , which it did. They then claimed on their "insurance" policies.

No. Don’t reach for the bottle just yet. You’ll need a clear head for what comes next. Because it actually gets worse. Why? Because the amount of money which is still out there waiting to be claimed on Credit Default Swaps is mind-boggling!

How did it become so large?

The answer is the word "replication." One Collateralised Debt Obligation could be "insured" time and time again. This is why the thing became so large

http://www.marketoracle.co.uk/Article11819.html

[salimfadhley]

This may be an attempted theft, but it couldnt possibly be true for one important reason:

All goldman-sachs code is written in an incredibly proprietary language called SLANG. Nobody else in the entire world of finance can use it. Even if you had stolen the source-code of your project youd never be able to run it anywhere unless you had all the source-code of the database (which is also proprietary) and five or six other incedibly specialized, utterly proprietary components.

So the chance of this guy getting anything useful onto a flash-disk or even a 100gb flash disk is pretty minimal.

I'm calling BS on this article. Anybody who spent any time working with GS systems would know that what the journalist is decribing is unfeasable.

[ErnestineBass]

Here's hoping someone uses that code to do GOOD for a change. ;-]

[Rex Featherston]

Read the Rolling Stones' article and lean how the market and citizens are being manipulated by Goldman Sachs. I would not trust them with one dollar. Any Senator or U.S. Representative that supports Goldman Sachs needs to be voted out of office. I worry about all the Goldman Sachs trained people in the Obama's administration. Maybe the Russian is the new Dillinger.

[BBackSoon]

It would appear that when you start turning over rocks at GS you find all kinds of nasty little things.

While these guys may be the ‘Best’ at this kind of thing I think it safe to say that others are also playing this same game.

[cavegal]

Interesting development. Wonder what's in that code.

[ErnestineBass]

Could be that code might prove Goldman's been running two sets of "books".

Read Matt Taibbi's piece on the NYSE's first ever decision to NOT publish GS' computer trades?

http://trueslant.com

[cavegal]

I read that and am curious as to why all of a sudden that occurred. Wondering if it had anything to do with them discovering the theft?!

[lechatnoir]

LOL I guess they are going to blame it all on this ;)

If you stay very quiet, you can almost hear the paper shredders over at GS, just below the sound of the choppers getting warmed up on the roof.

[ErnestineBass]

Heh...yep.

Curious this should come to light after last week's decicision by the NYSE to NOT post the details of Goldman Sach's computerized trades. Hmmmm...

Imagine what would happen if the pilfered "secret" GS' quant code could be used to prove the results of GS's computerized trading didn't exactly correspond with details posted by the NYSE over, say...the last year or two?

There is much, much more to this story...stay tuned!

[KipRip]

All right for Goldman Execs to manipulate the prices of oil, natural gas and corn. All right for them to be a central player in the mortgage bubble and tech bubble but cross them and it off to the pokey and throw away the key.

How come we can't live in the same anarchy they live in?

[ErnestineBass]

Heh...Goldman takes one to the Sachs.

This could turn out to be the story of the year...if not the decade.

"Sneakers", anyone?

[zenmonkman]

Gotta keep your fly closed!