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Federal Government Asks for Closed Courtroom to Protect Goldman Sachs Secrets
Posted By kurtnimmo On October 29, 2010 @ 9:08 am In U.S. News | Comments Disabled
October 29, 2010
The U.S. Department of Justice has requested that a federal judge seal the courtroom of a trial involving computer code theft in order to protect trade secrets of Goldman Sachs.
Sergey Aleynikov was arrested by the FBI on charges of stealing computer code that supports Goldman’s high frequency trading system, which allows the bank to buy and sell stocks in a fraction of a second.
Goldman Sachs and others use “flash trading” to send out automated sell offers at higher and higher prices until one comes back with no buyer. The program then drops back to the highest acceptable price and sells at what the buyer set as his maximum limit. This allows Goldman to always obtain the best possible selling price, while the buyer loses the normal give and take of bargaining. In the case of large orders, such as those from pension funds or mutual funds, this can cost the buyers a small fortune.
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