Did Goldman Provide the Smoking Gun?

I do not profess to be a rocket scientist, or even a scientist but I am pretty good at sniffing out scams, especially when the scam artist accidentally admits that they were running a scam!  I know many of you have been following the arrest of former Goldman Sachs employee Sergey Aleynikov.  From Bloomberg News;

Goldman May Lose Millions From Ex-Worker Code Theft 

Goldman Sachs Group Inc. 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, 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 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.

Here's the bomb; 

“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,”

Umm, what were the boys at Goldie using the program for?  I'm sorry, but as far as I know, the only way a computer program is guaranteed to make you money is if it is front running large trades.  Front running means acting in advance of a large customer's trades.  If he is selling a million shares you jump in ahead and hit bids on say 50,000 shares.  Smart crooks know how to keep it relatively small so it's not blatantly obvious.

So there are no misunderstanding I think Goldman should give up the full code to the Feds and then let the Fed try to make money using the full program.  Something tells me that without the tip off to large trades coming in from behind, the program is useless.  Just a hunch.

Got to run!  www.foxnews.com "The Strategy Room"  9 to 10 

Comments

[williambanzai7]

Goldman Smith: "We'd like to share a revelation that we've had during our trading time here on Wall Street. It came to us when we tried to classify the trading style your species and realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the markets but human investors do not. You move into an asset class and you buy and buy until every natural resource is consumed by a gigantic bubble and the only way you can survive is to move on and create another gigantic asset bubble. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human investors are a disease, a cancer of the markets. You're a plague and Goldman Smith is the cure."

Morpheus: You take the blue pill - the story ends, you wake up at your trading screen and believe whatever you want to believe. You take the red pill - you stay in Greenspanland and I show you how deep the bailout black-hole goes.

[eric]

I think they are coming undone

[RPB]

That quote is hysterical. Should be someone ELSE may use it to manipulate the markets.

[williambanzai7]

You know what I am thinking...