Proprietary Program Used To Manipulate Markets Stolen From Goldman Sachs
Posted by kandylini on July 11, 2009
By Bill Lindner, American Chronicle.
A Russian immigrant living in New Jersey was reportedly being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution — which it turns out, is none other than Goldman Sachs.
Sergey Aleynikov allegedly tried to steal the secret code to unlocking Goldman Sach’s automated stock and commodities trading business — computer codes and related-trading files that help this major financial institution generate millions of dollars in profits each year.
The software appears to give Goldman Sach’s an advantage over its competition when it comes to rapid-fire trading of stocks and commodities. It quickly processes rapid developments in the market and uses top-secret mathematical formulas that allow Goldman Sachs to make highly-profitable automated trades. The markets have been manipulated for some time.
Aleynikov, who has lived in the U.S. for 19 years, began working for Goldman Sachs in May 2007 as a computer programmer and left in early June according to the FBI.
Reuters reports that Aleynikov had a LinkedIn bio that says he joined Goldman Sachs in May 2007 and that he was the vice president for equity strategy for Goldman Sachs and that he was responsbile for ‘development of a distributed real-time co-located high-frequency trading platform,’ a platform that is decribed as ‘a very low latency (microseconds) event-driven market data processing, strategy and order submission engine.’
Someone Could Potentially Outswindle the Swindlers
Federal authorities believe Aleynikov may have had help. Aleynikov allegedly uploaded the stolen information to a German website that is registered to a person in London, leading to speculation that this may be a case of international espionage. It’s unknown how many people, if any, accessed the software that was uploaded to the German website but it is still out there.
A U.S. Attorney is quoted in Bloomberg News as saying that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways and it could harm Goldman Sachs if the stolen software that is worth millions is disseminated. As noted by Ars Technica, when U.S. government prosecutors claim that the release of Goldman’s program could potentially expose markets to manipulation, what they’re really saying is that some unknown party could use it to out-manipulate Goldman Sachs, and possibly even do something more ambitious like frustrate Goldman’s platform so that it fails while at the same time finding some way to short it. In other words, someone could potentially outswindle the swindlers.
Time will tell what kind of fallout this will have for Goldman Sachs. We need to learn more about the software used by Goldman Sachs, and how it was used to manipulate the market, and if anyone was helping Aleynikov. As noted by Reuters, this case has the potential to shed a light on the inner workings of an important profit center for Goldman Sachs and other Wall Street firms. We also need to find out why the NYSE is helping keep trades made by Goldman Sachs covered up.
NYSE Changes Reporting Methodology for Goldman Sachs
Aleynikov’s case could explain why the New York Stock Exchange (NYSE) decided to alter its methodology for reporting program stock trading — a move that appears to have been intentionally designed to keep stock market manipulation perpetrated by Goldman Sachs for their own gain covered up.
The new rule instituted by the NYSE removes the rule that required any company carrying out program trading — large computer-automated trades worth more than $1 million — to report the trades to the NYSE which made the information available to the public. The new rule makes it virtually impossible to track what’s going on in the NYSE, and appears to have been designed to shield Goldman Sachs in particular.
Goldman Sachs may have asked the NYSE to change its reporting methodology when it was discovered that someone might have cracked the proprietary computer codes used by Goldman Sachs to manipulate the stock market.
By making sure that there is no transparency, as noted by Zero Hedge, the NYSE will be able to cover up the complete dominance that Goldman Sachs exerts over the NYSE, ending the weekly Program Trading updates disclosed every Thursday indicating that Goldman Sachs has singlehandedly captured all of NYSE’s program trading. That’s not good since it means that the NYSE can manipulate the data and release it however they see fit. More on the NYSE’s new secrecy rule that highly benefits Goldman Sachs can be found from AlterNet.
Goldman Sachs Could Easily Manipulate the Market
Executive Order 12631 was signed on March 18, 1988 by then-President Ronald Reagan, after the biggest one-day market loss in history — also known as ‘Black Monday’ — when the Dow Jones Industrial average dropped 508 points on October 19, 1987. Executive Order 12631 created the “Plunge Protection Team,” a working group that was designed to keep the markets operating in the event of a sudden plunge in stock prices.
One of the ideas from the “Plunge Protection Team” was a ‘circuit breaker’ that would put an immediate halt to trading to give investors time to calm down before liquidating their assets in the stock market. A lot more detailed information about the “Plunge Protection Team” can be found in this article from Talking Points Memo.
The working group is an orchestrated mechanism that attempts to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures — acts which are forbidden by law. Adding more credibility to the fact that Goldman Sachs has been defrauding Americans out of billions of dollars for years — with the help of a corrupted, bought off U.S. government — is the fact that the permanent members of the “Plunge Protection Team” are Goldman Sachs alumni. Since 1988…
Goldman Sachs has also profited greatly from a deal with our Federal government regarding a new program instituted by the Feds called “The Supplemental Liquidity Provider” Program (SLP) that supposedly provides “market liquidity” for selected groups of 500 different NYSE stocks per SLP participant. Any guesses on who the only active participant in the SLP program is? Yep! It’s Goldman Sachs.
Again, Goldman Sachs alumni are at the helm of the “Plunge Protection Program,” also known as the “President’s Working Group On Financial Markets,” making it feasible that Goldman Sachs could have easily been frontrunning the rest of the market using their secret proprietary program, easily manipulating the market. Putting those in charge who are responsible for defrauding billions from Americans for the past several decades is both pointless and criminal, yet it continues unabated. A lot more regarding the information above can be found in the article from Talking Points Memo.
Time to End the Political-Economic Oligarchy That has Destroyed the U.S.
As Goldman Sachs’ fraudulent little world comes crashing down, some of their supporters are calling Matt Taibbi –the reporter who has broken several Goldman Sachs stories — anti-semitic. Cries of anti-semitism are nothing more than excuses used by those who perpetrated massive crimes against humanity, and those who support them, to try and hide the truth which needs to be exposed. More on the reality of idiots who constantly try to claim someone is anti-semitic can be found at AdamSolomon.org.
It remains to be seen how the case of the stolen proprietary software will unfold, but it’s painfully evident that our economy will not improve and the defrauding of American will not end until the enablers are finally dealt with and held accountable for their actions. It’s time to put an end to the political-economic oligarchy that has destroyed the U.S. at the expense of all who live here.