Monday, July 6, 2009

Sergio Posts Bond As Toxic Code Percolates In Cyberspace And Allows "Market Manipulation"

Now Bloomberg is finally on Sergio's case. Cutting to the chase, assistant U.S. Attorney Facciponti has some choice words:

The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said. “The copy in Germany is still out there, and we at this time do not know who else has access to it.

The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.

The proprietary code lets the firm do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

Not even going to attempt to elucidate in how many different ways the first sentence above is just...plain wrong. At least it is refreshing that none other than Goldman's own de facto attorney admits that the firm has created a piece of code that permits "market manipulation." When Goldman is the perpetrator, the manipulation is conveyed via "fair ways." And when the manipulator is someone else, the ways become "unfair."

Of course, Goldman will be happy to know that according to PACER, Aleynikov has just posted bail and is freely roaming the grounds of SDNY, EDNY and District of New Jersey, however the "PTS Office shall be permitted, to the extent possible, to monitor the deft's use of computer's or other electronic devices at his home or place of business to ensure that the deft does not access the data that is the subject of this criminal action." Something tells me monitoring Sergio's (former) place of business will yield a lot more clues in the prosecution's gathering of data for criminal action.

Maybe I am too drunk but... what the hell is going on here? When will Kevin Mitnick appear stage left and hold the world ransom for one hundred million dollars after announcing he has hijacked every SPY ETF ever put in circulation.

P.S. Any reference of the "Serge" individual referenced above to the now (in)famous Sergey Aleynikov is, of course, purely intentional.

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