Bloomberg News

Goldman Ordered to Advance Ex-Programmer Fees for N.Y. Case (2)

October 22, 2013

Goldman Sachs Group Inc. (GS:US) must advance computer programmer Sergey Aleynikov the legal fees he needs to fight New York state charges that he stole confidential source code from the company, a federal judge ruled.

Goldman Sachs at this time doesn’t have to pay the fees Aleynikov incurred defending federal charges that led to his conviction and imprisonment before the verdict was overturned, said U.S. District Judge Kevin McNulty in Newark, New Jersey. He said the two sides must engage in a pretrial exchange of evidence on that question.

“Immediate advancement of fees is required, subject only to an unsecured undertaking to repay them if the applicant is unsuccessful in the underlying litigation,” McNulty said in an opinion made public today.

Aleynikov was convicted in federal court in Manhattan in 2010 of stealing hundreds of thousands of lines of code and sentenced to 97 months in prison.

He was ordered freed in February 2012 when the U.S. Court of Appeals in New York reversed his conviction. In August of that year, he was arraigned in Manhattan on state charges of unlawful use of scientific material and duplication of computer-related material.

Vice President

Goldman Sachs, which employed Aleynikov from May 2007 through June 2009, argued that it didn’t have to pay Aleynikov’s fees in his state prosecution because he wasn’t an officer (GS:US) of the company, even though he was a vice president.

McNulty disagreed.

“It may be the case that Goldman (or the industry of which it is a part) has been profligate in conferring the title of vice president,” the judge wrote. “If so, Goldman must bear the consequences of that profligacy. Goldman might easily have chosen to be more sparing with job titles, or to confer them in some other way.”

Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment on the ruling.

Aleynikov’s attorney Kevin Marino said he will proceed with evidence exchanges on the question of whether Goldman Sachs must indemnify his client for the federal case.

“Goldman Sachs used its considerable power and influence to procure Mr. Aleynikov’s prosecution for crimes he did not commit,” Marino said in an interview. “It is only fitting that Goldman should now be forced to bear the cost of his restoring his reputation.”

The case is Aleynikov v. Goldman Sachs Group Inc., 12-cv-05994, U.S. District Court, District of New Jersey (Newark).

To contact the reporter on this story: David Voreacos in federal court in Newark, New Jersey, at dvoreacos@bloomberg.net

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


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Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $180.7 USD
    • -2.87
    • -1.59%
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