[cia-drugs] FW: GATA urges SEC, CFTC to probe Goldman trading program
-- Forwarded Message From: Vigilius Haufniensis thehatefuln...@comcast.net Date: Wed, 8 Jul 2009 22:16:35 -0700 To: muckblit muckb...@yahoo.com, Robert Millegan roads...@aol.com Subject: Fw: GATA urges SEC, CFTC to probe Goldman trading program Holy SHIT. Looks like there could actually be something to this!? Can you imagine hacking the PPT!? WTF! Good way to wake up dead. -Vmann http://www.gata.org/node/7569 GATA urges SEC, CFTC to probe Goldman trading program Submitted by cpowell on Tue, 2009-07-07 20:35. Section: Daily Dispatches http://www.gata.org/taxonomy/term/2 4:37p ET Tuesday, July 7, 2009 Dear Friend of GATA and Gold: GATA today urged the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission to investigate the Goldman Sachs Group Inc. computer trading program that, according to a federal prosecutor, the bank acknowledges can be used to manipulate markets. GATA's complaint referred to the Bloomberg News story dispatched to you yesterday -- http://www.bloomberg.com/apps/news?pid=20601087sid=a_6d.tyNe1KQ -- reporting the arraignment in U.S. District Court in New York of a former Goldman Sachs employee accused of stealing the program. The prosecutor, Assistant U.S. Attorney Joseph Facciponti, was quoted as telling the court: 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. In letters to the SEC and CFTC, GATA wrote: The assistant U.S. attorney's comment can be construed to suggest Goldman Sachs considers its own manipulation of markets to be fair, while such manipulation by others would be unfair. The court proceeding described in the Bloomberg News story would seem to impugn all markets in which Goldman Sachs trades. GATA asked each commission to investigate Goldman Sachs' trading program urgently and report its findings publicly. The text of GATA's letters is appended. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * GOLD ANTI-TRUST ACTION COMMITTEE INC. 7 Villa Louisa Road, Manchester, Connecticut 06043-7541 July 7, 2009 Gary Gensler, Chairman U.S. Commodity Futures Trading Commission 3 Lafayette Centre 1155 21st St., N.W. Washington, D.C. 20581 Mary L. Schapiro, Chairman U.S. Securities and Exchange Commission 100 F St. N.E. Washington, D.C. 20549 Dear Chairman Gensler / Dear Chairman Schapiro: I'm enclosing a copy of a report distributed July 6 by Bloomberg News Service about the U.S. government's prosecution of a former employee of Goldman Sachs Group Inc. involving the purported theft of a Goldman Sachs computer trading program. The report quotes Assistant U.S. Attorney Joseph Faccipointi as saying in U.S. District Court in New York City: 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. If the report quotes the assistant U.S. attorney correctly, and if he was characterizing Goldman Sachs' position correctly, then Goldman Sachs claims to have possession of a computer trading program that can manipulate markets. The assistant U.S. attorney's comment can be construed to suggest Goldman Sachs considers its own manipulation of markets to be fair, while such manipulation by others would be unfair. The court proceeding described in the Bloomberg News story would seem to impugn all markets in which Goldman Sachs trades. On behalf of the Gold Anti-Trust Action Committee Inc., I ask your commission to investigate Goldman Sachs' trading program urgently and report its findings publicly. Thanks for your consideration. With good wishes. CHRIS POWELL Secretary/Treasurer -- End of Forwarded Message
[cia-drugs] FW: RUSSIA HACKS PPT!? [1 Attachment]
-- Forwarded Message From: Vigilius Haufniensis thehatefuln...@comcast.net Date: Wed, 8 Jul 2009 22:16:23 -0700 To: muckblit muckb...@yahoo.com, Robert Millegan roads...@aol.com Subject: Fw: RUSSIA HACKS PPT!? So, is this dude a Putin guy or a Russian Mafia guy!? And does this code include PROMIS? THIS IS HUGE. -Vmann Sergey Aleynikov http://search.bloomberg.com/search?q=Sergey+Aleynikovsite=wnewsclient=wnews proxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields= wnnissort=date:D:S:d1 , an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading http://www.bloomberg.com/apps/quote?ticker=GS%3AUS software. http://www.bloomberg.com/apps/news?pid=20601087sid=a_6d.tyNe1KQ Goldman Trading-Code Investment Put at Risk by Theft (Update3) By David Glovin and Christine Harper July 6 (Bloomberg) -- Goldman Sachs Group Inc. http://www.bloomberg.com/apps/quote?ticker=GS%3AUS may lose its investment in a proprietary trading code and millions of dollars from increased competition if software allegedly stolen by a former employee gets into the wrong hands, a prosecutor said. Sergey Aleynikov http://search.bloomberg.com/search?q=Sergey+Aleynikovsite=wnewsclient=wnews proxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields= wnnissort=date:D:S:d1 , an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading http://www.bloomberg.com/apps/quote?ticker=GS%3AUS software. Teza Technologies LLC, a Chicago-based firm co-founded by a former Citadel Investment Group LLC trader, said it suspended Aleynikov, who started there on July 2. At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov¹s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs http://www.bloomberg.com/apps/quote?ticker=GS%3AUS may be harmed if the software is disseminated. ³The 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,² Facciponti said, according to a recording of the hearing made public today. ³The copy in Germany is still out there, and we at this time do not know who else has access to it.² Preposterous¹ The prosecutor added, ³Once it is out there, anybody will be able to use this, and their market share will be adversely affected.² The proprietary code lets the firm do ³sophisticated, high- speed and high-volume trades on various stock and commodities markets,² prosecutors said in court papers. The trades generate ³many millions of dollars² each year. Defense attorney Sabrina Shroff said in court that the government¹s allegations are ³preposterous.² The firm was aware that Aleynikov, who is the father of three young girls, was downloading programs to his personal computer to do work at home and that he hasn¹t disseminated the code, the lawyer said. ³If Goldman Sachs cannot possibly protect this kind of proprietary information that the government wants you to think is worth the entire United States market, one has to question how they plan to accommodate every other breach,² she said. Michael DuVally http://search.bloomberg.com/search?q=Michael+DuVallysite=wnewsclient=wnews; proxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=w nnissort=date:D:S:d1 , a spokesman for Goldman Sachs in New York, declined to comment. $750,000 Bail U.S. Magistrate Judge Mark Fox http://search.bloomberg.com/search?q=Mark+Foxsite=wnewsclient=wnewsproxyst ylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=wnnisso rt=date:D:S:d1 ordered Aleynikov, who earned $400,000 a year, to be held by on $750,000 bail, after prosecutors claimed he posed a threat to the community. Aleynikov planned to earn three times his salary by joining a startup company and engaging in high-volume automated trading, prosecutors said. Aleynikov posted bail today and was released. Aleynikov didn¹t speak at the hearing, except to say that he understood the conditions of his bail. Teza, co-founded by former Citadel trader Misha Malyshev http://search.bloomberg.com/search?q=Misha+Malyshevsite=wnewsclient=wnewsp roxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=wn nissort=date:D:S:d1 , said in
[cia-drugs] FW: Goldman Sachs Loses Grip on Its Doomsday Machine: Jonathan Weil [1 Attachment]
-- Forwarded Message From: Vigilius Haufniensis thehatefuln...@comcast.net Date: Wed, 8 Jul 2009 22:15:57 -0700 To: muckblit muckb...@yahoo.com, Robert Millegan roads...@aol.com Subject: Fw: Goldman Sachs Loses Grip on Its Doomsday Machine: Jonathan Weil Hey man, these posts don't seem to be going to the cia-drugs group. Can you make sure they go through? Thanks. I think this is a HUGE story. -Vmann http://www.bloomberg.com:80/apps/news?pid=20601039sid=aFeyqdzYcizc Goldman Sachs Loses Grip on Its Doomsday Machine: Jonathan Weil Commentary by Jonathan Weil July 9 (Bloomberg) -- Never let it be said that the Justice Department can¹t move quickly when it gets a hot tip about an alleged crime at a Wall Street bank. It does help, though, if the party doing the complaining is the bank itself, and not merely an aggrieved customer. Another plus is if the bank tells the feds the security of the U.S. financial markets is at stake. This brings us to the strange tale of Goldman Sachs Group Inc. http://www.bloomberg.com/apps/quote?ticker=GS%3AUS and Sergey Aleynikov http://search.bloomberg.com/search?q=Sergey+Aleynikovsite=wnewsclient=wnews proxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields= wnnissort=date:D:S:d1 . Aleynikov, 39, is the former Goldman computer programmer who was arrested on theft charges July 3 as he stepped off a flight at Liberty International Airport in Newark, New Jersey. That was two days after Goldman told the government he had stolen its secret, rapid-fire, stock- and commodities-trading software in early June during his last week as a Goldman employee. Prosecutors say Aleynikov uploaded the program code to an unidentified Web site server in Germany. It wasn¹t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: ³The 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.² How could somebody do this? The precise answer isn¹t obvious -- we¹re talking about a black-box trading system here. And Facciponti didn¹t elaborate. You don¹t need a Goldman Sachs doomsday machine to manipulate markets, of course. A false rumor expertly planted using an ordinary telephone often will do just fine. In any event, the judge rejected Facciponti¹s argument that Aleynikov posed a danger to the community, and ruled he could go free on $750,000 bail. He was released July 6. Market Manipulation All this leaves us to wonder: Did Goldman really tell the government its high-speed, high-volume, algorithmic-trading program can be used to manipulate markets in unfair ways, as Facciponti said? And shouldn¹t Goldman¹s bosses be worried this revelation may cause lots of people to start hypothesizing aloud http://www.zerohedge.com/ about whether Goldman itself might misuse this program? Here¹s some of what we do know. Aleynikov, a citizen of the U.S. and Russia, left his $400,000-a-year salary at Goldman for a chance to triple his pay at a start-up firm in Chicago co- founded by Misha Malyshev http://search.bloomberg.com/search?q=Misha+Malyshevsite=wnewsclient=wnewsp roxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=wn nissort=date:D:S:d1 , a former Citadel Investment Group LLC trader. Malyshev, who oversaw high-frequency trading at Citadel, said his firm, Teza Technologies LLC, first learned about the alleged theft July 5 and suspended Aleynikov without pay. Preposterous¹ Charges Aleynikov¹s attorney, Sabrina Shroff, told the judge at the bail hearing that Aleynikov never intended to use the downloaded material ³in any proprietary way² and that the government¹s charges were ³preposterous.² Goldman isn¹t commenting publicly about any of this, though it seems the bank¹s bosses want us to believe there¹s no need to worry. On July 6, Dow Jones Newswires quoted a ³person familiar with the matter² saying this: ³The theft has had no impact on our clients and no impact on our business.² Note that this person was so familiar with Goldman http://www.bloomberg.com/apps/quote?ticker=GS%3AUS that he or she spoke of Goldman¹s clients as ³our clients² and Goldman¹s business as ³our business.² By comparison, last Saturday, while most Americans were enjoying the Fourth of July holiday, Facciponti was in court warning of looming threats to Goldman and the financial markets. ³The copy in Germany is still out there,² the prosecutor said, according to an audio recording of the hearing. ³And we at this time do not know who else has access to it and what¹s going to happen to that software.² Secret Software ³We believe that if the defendant is at liberty, there is a substantial danger that
[cia-drugs] **FLASH** Goldman Code Theft BOMBSHELL?
http://www.market-ticker.org/archives/1192-FLASH-Goldman-Code-Theft-BOMBSHELL.html **FLASH** Goldman Code Theft BOMBSHELL? Something really ugly popped up on Daily Kos yesterday late in the afternoon. ...GS, through access to the system as a result of their special gov't perks, was/is able to read the data on trades before it's committed, and place their own buys or sells accordingly in that brief moment, thus allowing them to essentially steal buttloads of money every day from the rest of the punters world. Two things come out of this: 1. If true, this should be highly illegal, and would, in any sane country result in something like what happened to Arthur Andersen... (2. ... is way off point) God help Goldman if this is true and the government goes after them. This would constitute massive unlawful activity. Indeed, the allegation is that Goldman alone was given this access! God help our capital markets if this is true and is ignored by our government and regulatory agencies, or generates nothing more than a handslap. Nobody in their right mind would ever trade on our markets again if this occurred and does not result in severe criminal and civil penalties. There apparently is reason to believe that Sergey might have been involved in exactly this sort of coding implementation. Specifically, look at the patent claims cited on DailyKos; his expertise was in fact in this general area of knowledge in the telecommunications world.. This is precisely the sort of thing that a Unix machine, sitting on a network cable where it can see traffic potentially not intended for it, could have an interface put into what is called promiscuous mode and SILENTLY sniff that traffic! ASSUMING THE TRAFFIC IS PASSING BY THE MACHINE ON THE WIRE THIS IS TRIVIALLY EASY FOR ANY NETWORK PROGRAMMER OF REASONABLE SKILL TO DO. IF THAT TRAFFIC IS EITHER UNENCRYPTED OR IT IS EASY TO BREAK THE ENCRYPTION. Folks, I have no way to know what the code in question does, but if there's anything to this - anything at all - there is a major, as in biggest scam of the century - scandal here - something much, much bigger than Madoff or Stanford. What would this mean, if it was all to prove up? It would mean that Goldman was able to see transaction order flow - bid, offer, and execute messages - before they were committed in the transaction stream. Such a SNIFF would be COMPLETELY UNDETECTABLE by the sender or recipient of the message. The implication of this would be that they would be able to front-run any transaction where the data was visible to them, thereby effectively stealing pennies from each transaction they were able to front-run. Again: I have absolutely nothing on the content of the allegedly-stolen code nor can I validate the claim made that Goldman had special network access. Nothing. All I have to go on with regards to market manipulation (which such a program would be, writ large!) is the statement of the US Attorney that I cited in my earlier Ticker. This may be nothing more than a crazy conspiracy theory put out by someone at Daily Kos. But consider the following: The last few days the the market has traded organically. I and many other market participants have noted that prior to the week before July 4th the market had been acting very odd - normal correlations between interest rate, foreign exchange the the stock markets had been on tilt for the previous couple of months, with the amount of tiltage increasing dramatically in the last three or four weeks. In fact, many of my usual indicators that I use for daytrading had become completely useless. Suddenly, just before the July 4the weekend, everything started correlating normally again. I have no explanation for this light-switch change but it aligned almost exactly with the day the NYSE had computer problems and extended trading by 15 minutes. Was there a configuration change made to their networking infrastructure, one asks? Zerohedge's information, if you believe it, seems to point toward some sort of distortion. The cite above claims statistically as likely as an asteroid hitting earth it is not true proof of distortion in the market. I have not analyzed the data to independently validate that conclusion, but even if the odds of these effects in the market being random chance are only as good as getting hit by a tornado this afternoon.. Every market participant deserves answers on this point. Specifically to the NYSE and all other markets where colocation connections are made and allowed: a.. Was it possible for message traffic to be seen by computers on your network and colocated into your infrastructure by other than the originator and recipient? That is, was it physically possible for anyone to sniff messages to and from other market participants. b.. If it was possible, is it no longer possible, and if so, when was that change made? I believe
[cia-drugs] Citadel Joins The Program Trading Industrial Espionage Fray, Sues Malyshev And Teza
http://zerohedge.blogspot.com/2009/07/citadel-joins-program-trading.html Thursday, July 9, 2009 Citadel Joins The Program Trading Industrial Espionage Fray, Sues Malyshev And Teza Posted by Tyler Durden at 3:15 PM The gloves are now completely off in the escalating program trading fiasco that was started by Goldman's former Sergey Aleynikov. Oddly, while Zero Hedge was fully expecting the Teza injunction to come from Goldman, it seems Griffin was more than happy to burden himself with that task. Hopefully Citadel is not faced with a case of reverse discovery and forced to document the 40% returns that it generated compliments of Malyshev when all its other groups on average lost around 50% in 2008. From Bloomberg: Citadel Investment Group LLC, the $12 billion hedge fund firm founded by Ken Griffin, sued three former executives and the firm they founded, Teza Technologies LLC, claiming violation of non-competition agreements. This is a case of industrial espionage, Citadel said today in a 25-page complaint. The firm seeks a court order barring the individual defendants from conducting any business through Teza or related entities that compete with Citadel, for the duration of the agreements. Teza described itself in a July 6 e-mail as a formative firm that is neither trading nor investing. Named after a river in western Russia, the Chicago-based firm was co-founded by Misha Malyshev, Jace Kohlmeier and Matt Hinerfeld. All were named in the complaint. We didn't violate any non-competes, their attorney Chris Gair said today in a telephone interview. He said his clients took no trade secrets from Citadel. Malyshev worked at Citadel for almos six years and until February was its head of high-frequency trading. He was on the team that ran a $1.8 billion tactical trading fund that uses computer model to make trades every few seconds. The fund climbed 40 percent last year, while its main funds tumbled 55 percent. U.S. agents arrested ex-Goldman Sachs Group Inc. computer programmer Sergey Aleynikov on July 3, one day after he started working for Teza, on charges he stole trading software from Goldman. Teza said in the July 6 statement it suspended Aleynikov without pay after the arrest. The firm said it learned of the allegations on July 5. It had nothing to do with us, Gair said of the Aleynikov matter. The case is Citadel Investment Group LLC v. Teza Technologies LLC., 09CH22478, Chancery Division, Cook County, Illinois, Circuit Court, (Chicago). Zero Hedge is currently going through Chancery Court filings and will present when and if it discovers anything perticularly juicy.
