New York - A smiling former Goldman Sachs computer programmer was
freed from prison Friday after a surprise ruling from a federal appeals
court reversed his conviction on charges he stole computer code.
"Justice occasionally works," declared the beaming Russian-born programmer, Sergey Aleynikov.
He said he "just jumped all over the place" at 6 a.m.,
the moment he read and repeatedly reread an email from his lawyer
informing him that the 2nd U.S. Circuit Court of Appeals in Manhattan
had reversed his conviction. The words were, he said, "'We won!'"
The reversal came less than a day after defense lawyer
Kevin Marino told a three-judge panel that Aleynikov was wrongly
convicted. The 42-year-old man had already served a year of a
more-than-eight-year prison sentence after a jury convicted him in
December 2010 of stealing trade secrets and transporting stolen property
in interstate and foreign commerce.
Aleynikov said outside court that he looked forward to seeing his family, including his 8-, 6- and 3-year-old daughters.
"This is such big news to me that I don't have time to
think about what will happen tomorrow," said Aleynikov, dressed in a
gray sweat suit and white sneakers. "Today, it's a victory."
His lawyer said: "I've never felt better in my life."
The highly unusual immediate dismissal of a conviction
by the appeals court came in a case that tested the boundaries of what
can be considered a crime as companies seek to protect their
intellectual property from competitors.
Aleynikov has been in prison since he was sentenced in
March. A three-judge appeals panel heard arguments Thursday, but the
judges gave no indication they would reverse the lower court hours later
with a terse, one-paragraph order. The 2nd Circuit said it would issue a
written ruling "in due course" to explain its decision.
Marino said Aleynikov's immediate reaction when he spoke to him early Friday was: "There is justice in the world."
"It's justice because Sergey Aleynikov did not commit
either of the crimes with which he was charged," Marino said. "The
government's attempt to stretch this criminal federal statute beyond all
recognition resulted in a grave injustice that put Sergey Aleynikov in
prison for a year."
In oral arguments before the 2nd Circuit, Marino called
it "ridiculous" and "preposterous" that his client was facing eight
years in prison because he was found to have information that was not a
product that Goldman Sachs sold in interstate and foreign commerce. A
prosecutor had asked the court to uphold the conviction, saying
protection of trade secrets was the only way companies could retain
their technological advantages.
Prosecutors declined to comment Friday, though they
agreed during a court appearance that Aleynikov could be released on his
own recognizance without conditions while everyone awaited the full
appeals court opinion, which was unlikely to be released for weeks.
Aleynikov, a naturalized U.S. citizen who emigrated
from Russia in 1990, was first arrested in July 2009 as he returned from
a trip to Chicago to the offices of his new employer, Teza Technologies
LLC.
Prosecutors accused him of taking trade secrets from
Goldman Sachs Group Inc. in 2008 to help his new company gain an
advantage with high-speed trading. He made $400,000 as a vice president
at Goldman Sachs. His move to Teza enabled him to be paid $300,000
annually, with a $700,000 bonus in his first year and a revenue-sharing
plan that would have added $150,000 annually.
During a two-week trial, Marino told jurors that his
client was merely trying to copy parts of the company's software that
were taken from public software codes. He acknowledged that Aleynikov
had violated the company's confidentiality agreements but said that was a
civil matter.
The trial brought into focus sophisticated computer
programs that use mathematical formulas to execute scores of trades in
short periods of time after evaluating moment-to-moment developments in
the markets.
The government said Goldman Sachs makes millions of
dollars a year in profits from high-frequency trading and carries a
competitive advantage over rivals because of the speed of its computer
programs.
At sentencing, Aleynikov said he very much regretted
"the foolish decision to download information before I left Goldman
Sachs," though he added that only some of the information he took was
proprietary to the company.
He said he "never meant to cause Goldman any harm, and I haven't acted with malice to anyone at the bank."
After he was freed, Aleynikov said he did not know what
he would do next, though he noted that he believed his skills were up
to date. He said he did not have access to a computer in the prison but
continued to write computer programs "in my head."