This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Five Dumbest Things on Wall Street: July 10

Goldman's Not So Golden Boy

Sergey Aleynikov's dream was to be a big-shot trader. Turns out he may have traded away a lucrative career at Goldman Sachs (GS - Get Report) for a prison cell.

Aleynikov, who was paid $400,000 a year as a computer programmer for the investment bank, was arrested by the FBI July 3 and charged with "theft of trade secrets." Specifically, the 39-year old Russian immigrant is accused of stealing codes used for Goldman's highly sophisticated, rapid-fire stock and commodities trading and then uploading them to a computer server in Germany. He was released Monday after meeting his $750,000 bail.

Aleynikov told authorities his plan was merely to gather "open source" files on which he had worked, but he "later realized that he had obtained more files than he intended," according to an FBI affidavit filed in the case. Goldman declined to comment, but a Reuters source said the firm was unharmed by the computer breach.

Aleynikov worked at Goldman from May 2007 until June 5. On July 2, he started working at Teza Technologies, a Chicago-based hedge fund focused on high-volume trading. Teza has since suspended him without pay, according to Bloomberg, after learning of the allegations.

We here at The Five Dumbest Lab fully subscribe to the rule of innocent until proven guilty, so we won't officially condemn Aleynikov until a jury weighs in. (Hey! We may be snarky, bordering on obnoxious, but we do have our principles.)

That said, we do operate on a dumb until proven not dumb protocol. And in this case, Aleynikov is undoubtedly guilty on all counts of grand stupidity.

Based on analysts' 2009 earnings forecasts, Goldman is on track to pay out as much as $20 billion this year, or about $700,000 per employee. So Aleynikov was in line for a huge pay day just by sticking around till bonus time. And whether or not his intent was criminal, only an idiot would screw around with Goldman's top-secret trading recipe so close to leaving the firm.

Once the government gains access to the German server, prosecutors will be able to determine if Aleynikov transferred other confidential data. If the feds can prove Aleynikov planned to use the code at his new company, then it's likely his once-golden goose will be cooked.

Dumb-o-meter score: 95 -- Clumsy criminal or unknowing oaf? Either way, Aleynikov was too greedy even for Goldman.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.57 0.06%
GS $198.10 0.38%
JPM $63.24 0.64%
LVS $56.34 2.14%
WFC $54.36 0.57%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs