Bloomberg News

Former Flow Traders Employees Indicted for Software Theft (2)

October 07, 2013

Three men accused of stealing software from Dutch trading house Flow Traders were indicted on related charges by a grand jury in New York, Manhattan District Attorney Cyrus Vance Jr. said.

Jason Vuu, 26, of San Jose, California, Glen Cressman, 26, of Fort Lauderdale, Florida, and Simon Lu, 25, of Pittsburgh were indicted on charges of unlawful duplication of computer-related material and unlawful use of secret scientific material, Vance’s office said today in statement.

“The theft of computer software developed in-house is a serious and growing threat to businesses, one my office will continue to take extremely seriously,” Vance said in the statement.

Vuu and Cressman worked as traders at the Amsterdam-based Flow Traders’ Manhattan office before resigning in March, according to the statement. Vuu is accused of e-mailing himself trading strategies for several of the company’s trading desks and computer code for its proprietary trading platform from August 2011 to August 2012, Vance’s office said.

Vuu then worked with Lu, a friend from college, to create a trading platform for a company they planned to form, Vance said. Cressman e-mailed himself proprietary trading strategies on two occasions in December 2012, Vance’s office said.

Search Warrants

Search warrants executed on their homes found several electronic devices capable of being used to share stolen code, Vance’s office said.

In today’s announcement, Vance called on the state Legislature to adopt recommendations of a task force on white-collar crime and “protect intellectual property as rigorously as physical property.”

“When an employee takes software to create his own company, anybody would classify that as ‘stealing’ or ‘theft,’” he said. “Under existing state law, however, stealing valuable printer toner out of an office supply closet is a more serious offense than stealing valuable computer source code.”

Vuu and Lu were arraigned today before Justice Laura A. Ward in Manhattan, pleaded not guilty and were released on bail, according to Vance’s office. Cressman is scheduled to be arraigned before Ward on Oct. 15. They face as long as four years in prison on each count if convicted.

Vance’s office announced charges against the three men in August.

Proprietary Trading

Flow Traders describes itself on its website as a “leading international proprietary trading house” founded in 2004 in Amsterdam that trades securities, futures, options, exchange-traded funds, commodities, bonds and foreign exchange instruments.

Vuu told authorities after his arrest in August that he worked for Flow Traders for three years and quit “because of a newborn baby and stress,” according to a voluntary disclosure form provided by prosecutors. Vuu said he “never took any source code and didn’t have access to it.”

“I did not send myself anything,” Vuu told authorities. “I am developing my own trading system, which is written in C# as opposed to the Java used by Flow Traders. I had a project called ‘Turtle,’ but have started something new called ‘Alpha.’ I spoke with a company in China to start trading there, but decided not to.”

MIT Roommates

According to the disclosure form, Lu told authorities that Vuu, who was his roommate for several years at the Massachusetts Institute of Technology, asked him about a year ago help develop a computer-based trading platform that they began working on in February. Lu said he did the work voluntarily, “as a hobby.”

Lu said he had no knowledge of Vuu’s relationship with Flow Traders, other than that he worked there, and said he never discussed proprietary code of any kind with him. Lu said he used a freely available code.

“To the best of my knowledge, everything I worked on was freely available publicly, or commercially purchased,” Lu told authorities, according to the form.

Jeremy Saland, an attorney representing Vuu, said he’s confident that the district attorney’s office will “see what transpired is not what they initially believed.”

Charles Ross, a lawyer for Cressman, said his client is innocent of all the charges against him.

‘Completely Unravel’

“We are confident that in court the district attorney’s case against him will completely unravel,” Ross said in a statement.

Paul Shechtman, an attorney representing Lu, and Flow Traders didn’t immediately respond to messages seeking comment on the indictment.

The three men are charged with the same crimes as Sergey Aleynikov, the former Goldman Sachs Group Inc. programmer accused of stealing proprietary software code from that company firm. Aleynikov was freed from federal prison in New Jersey in 2012 after an appeals court overturned his conviction. He was charged for the same alleged conduct by Vance’s office six months later.

The cases are People of the State of New York v. Vuu, 3869/2013, and People of the State of New York v. Cressman, 3870/2013, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus