Sergey Aleynikov, a senior programmer for Goldman Sach’s high frequency trading software, has been indicted for software theft.

It’s alleged that he took the software, and sent copies of it to a server in Germany.

This case is odd.

First, the entire high frequency trading thing smells of corruption: The idea is that by having servers colocated in the market, you pick up a few milliseconds speed, and so can execute trades between when someone else requests a buy, and when their transaction is actually executed.

To my, admittedly untrained, gut this sounds identical to front-running, which is illegal.

Additionally, the twists and turns of the trial, where Aleynikov’s lawyers made some fairly routing requests for things like his personnel file to show that he was not a disgruntled employee, had the squid’s^* lawyers seriously freaking out, and suggesting that charges should be dropped.

I think that there are some very real bits of corruption that might be uncovered in the trial, though the prosecution, defense, and judge might very well find a way to suppress that, because, after all, it’s Goldman Sachs, and rule number 1 of Goldman Sachs is that Goldman Sachs has friends in high places, so it always gets what it wants.

My prior posts are here.

^*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.