Goldman to pay legal fees of ex-employee accused of stealing from them

American courtroom

A victim of a crime would never be expected to pay for the perpetrator’s lawyer to defend the case.

But corporate law can be counterintuitive, and Goldman Sachs found itself on the wrong side of a court decision that found that the bank’s bylaws require it to advance the legal fees of a former employee who has been accused of stealing its computer code.

The New York Times reports that Sergey Aleynikov was a computer programmer at Goldman who planned to leave the firm for a new job in which he would help set up a competing high-speed trading system. Before resigning in 2009, he downloaded computer code to help put together the trading platform.

That was the start of a legal odyssey with more twists than those seen in most white-collar crime cases. Goldman complained to the government about Aleynikov’s conduct, leading the Justice Department to file theft and economic espionage charges. After Aleynikov was convicted and spent a year in prison, a federal appeals court overturned his conviction and dismissed the charges, finding that the federal statutes used in the case did not cover his actions.

A few months later, the New York district attorney charged Aleynikov with violating a state statute prohibiting the theft of secret scientific information. A judge rejected Aleynikov’s claim that the charges violated the protection against double jeopardy under New York law, and he is awaiting trial.

After the latest charges, Aleynikov filed a lawsuit against Goldman in Federal District Court in New Jersey, demanding that the bank pay his legal fees from fighting the federal charges and advance the costs of defending against the state case.

To access the complete New York Times article hit the link below:

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image: © Clyde Robinson

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