He is accused of stealing Goldman Sachs’ proprietary high frequency trading software, but one of the three counts against him, for unauthorized computer access, has been dismissed.

I’ve always maintained that HFT is actually illegal front-running, or at least it was illegal before Treasury Secretary Robert “Why am I not in jail?” Rubin got his hands on the regulatory regime, and as such, I have always wondered if there was a cover-up of some kind, seeing as how the prosecutors have admitted that this code could be used to manipulate the markets.

A twist in the case that I was unaware of was that Sergey is not the only one the Feds are going after on this, as, “Two months after Aleynikov’s indictment, prosecutors charged former Societe Generale trader Samarth Agrawal with stealing computer code used in high-frequency proprietary trading in the French bank’s New York office.”

I am beginning to think that there is an official policy of allowing “systemically important” banks to skim profits from the markets in order to bolster balance sheets that are far shakier than has been revealed, but they want to keep this technology out of the hands of the small fry, because it would make the flash crash look like a weenie roast if too many people got their hands on this technology.

Background here