More than a month after the arrest of former Goldman Sachs programmer Sergey Aleynikov on charges of stealing high-frequency trading software code from his employer rocketed through the blogosphere, the New York Times rumbles in with a feature by Alex Berenson on the saga that provides a lot more color, but not much more substance to the story than we already knew.
But Dean Baker, ever the mainstream media gadfly, seizes upon one peculiar point.
At a bail hearing three days later, a federal prosecutor asked that Mr. Aleynikov be held without bond because the code could be used to "unfairly manipulate" stock prices.
[The story] almost completely ignores the more basic issue that the federal government effectively claims that Goldman Sachs has software that can be used to manipulate stock prices. If the software can be used for illegal purposes, why is it more serious that a relatively low level employee has access to it than Goldman Sachs' top executives?
That is the rub, isn't it? What safeguards are in place to determine that Goldman Sachs or any other high-frequency stock trader isn't abusing its cutting-edge software tools? And if the software could manipulate stock prices, maybe it should be illegal, no?