Former Two Sigma Analyst Gao Pleads Guilty to Software Theft (Bloomberg) -- A former analyst at the quantitative hedge fund Two Sigma pleaded guilty to taking the firm’s data, the second of five men charged in a crackdown on the theft of intellectual property from financial firms to resolve his case. Kang Gao, 29, a native of China, admitted to a single count of unlawful duplication of computer-related material in a hearing before New York State Supreme Court Justice Jill Konviser in Manhattan today in exchange for a 10-month sentence. The former analyst was arrested in February 2013 and accused of taking confidential trading models and strategies and other information from Two Sigma. He faced a maximum of four years in prison if convicted of each charge, although prosecutors sought a sentence of no more than three years. Gao is one of five people to be charged by Manhattan District Attorney Cyrus Vance Jr. in the intellectual-property theft crackdown. Wall Street is increasingly protective of software used for strategies such as high-speed trading, which have become more valuable as firms seek advantages over rivals that can be measured in milliseconds. “Computer source codes and proprietary trading methods are often the lifeblood of a company’s business model, and stealing them is a crime,” Vance said in a statement. “Kang Gao admitted to copying highly confidential material from his employer before heading to China to meet with investors in the company he hoped to launch.” Earlier Outcome Gao’s plea came a day after Jason Vuu, 24, of San Jose, California, was sentenced in the same court to five years’ probation for stealing computer source code and strategies from Flow Traders, an Amsterdam-based trading house. Vuu, along with another ex-Flow Traders employee, Glen Cressman, 28, of Fort Lauderdale, Florida, and Vuu’s former roommate, Simon Lu, 26, of Pittsburgh, were charged in August 2013 with copying and taking proprietary trading strategy files and computer source code. All four were charged with the same crimes as Sergey Aleynikov, the former Goldman Sachs Group Inc. programmer accused of stealing software code from his old firm who was an inspiration for Michael Lewis’s best-seller “Flash Boys.” Aleynikov was freed from federal prison in New Jersey in 2012 after an appeals court overturned his conviction. He was charged for the same conduct by Vance’s office six months later under a state law and is scheduled to go to trial in April. Defense Lawyer Gao’s attorney, Marc Agnifilo, said he doesn’t expect his client to serve any additional time as he already spent eight months in detention following his arrest. The lawyer said he anticipates Gao will be deported after sentencing, scheduled for April 28. He is in the U.S. on a work visa and hasn’t been employed, making it likely his immigration status would change if he went to trial, Agnifilo said. “It’s a reasonable plea,” Agnifilo said after Tuesday’s hearing. “We still maintain it’s an issue of first impression. There are sound reasons to take the plea given his immigration status. It’s a reasonable and practical solution to this very difficult legal matter.” Two Sigma, which also sued Gao over the alleged theft, uses complex mathematical models to decide when to buy and sell securities. The New York-based firm was founded in 2001 by David Siegel, a former chief technology officer at Tudor Investment Corp., and John Overdeck, a former managing director at D.E. Shaw & Co. Gao was a financial research analyst for the firm from about August 2010 until he resigned in February. Company Statement “Earlier today Kang Gao pleaded guilty and admitted under oath that he committed the felony of unlawful duplication of computer related material in the first degree in connection with Two Sigma’s intellectual property,” Two Sigma said in a statement. “The intellectual property is integral to our support for our investors, which include some of the world’s largest public and corporate pension plans, educational endowments and foundations, among many others.” Gao attended Peking University before transferring to the Massachusetts Institute of Technology, where he graduated in 2009 with degrees in physics and electrical science and engineering. He worked as a summer intern at Merrill Lynch & Co. in New York and, after graduation, at DRW Holdings LLC in Chicago before taking an analyst position in 2010 with Two Sigma. Prosecutors said Gao used a remote access device to view the firm’s confidential trading models and e-mailed documents to himself that included trading strategies, models and a marketing presentation from August 2013 to February 2014. All of the firm’s employees are forbidden from taking, disclosing or distributing its modeling information. New Company Gao flew to China in December 2013 after duplicating some of the information and met in Beijing with a wealthy potential investor for a company he wished to start, prosecutors said. According to its lawsuit, which is pending, Two Sigma confronted Gao after learning he had viewed code unrelated to trading models he had worked on. Gao said he looked at the code “out of curiosity,” according to the complaint. He continued to view information he wasn’t allowed to see on his home computer and repeatedly e-mailed confidential information to his personal Gmail account, including research on trading in China and a new method to improve models, the hedge fund said in its suit. In January 2014, Two Sigma said, Gao flew to the U.K. for a job interview with GSA Capital Partners LLP, a competing hedge fund. Change Planned Upon his return, he continued viewing models that he wasn’t authorized to access, wrote a letter to U.S. immigration officials indicating his intention to resign from his job and start a company in China, and researched cases involving employee theft of trade secrets and other intellectual property, Two Sigma alleged. On Feb. 5, after winning a job at Citadel LCC in Chicago, Gao resigned from Two Sigma. Six days later, he was arrested during his exit interview and taken to jail. Citadel rescinded its job offer a week later. Konviser last year denied a request by Gao’s attorneys to throw out the charges. His lawyers argued that the information Gao was accused of taking was written by Gao himself and wasn’t proprietary to Two Sigma. The criminal case is People of New York v. Gao, 00640-2014, New York State Supreme Court, New York County (Manhattan).
Ex-Two Sigma Analyst Can't Dodge IP Trial, But Bail Is Cut Law360, New York (October 14, 2014, 5:07 PM ET) -- A former analyst for hedge fund Two Sigma Investments LLC accused of stealing trade secrets lost a bid Tuesday to escape a criminal trial when a New York judge found the grand jury's proceedings to be legally sound, but won a reprieve on a hefty bail that has kept him locked up. While New York Supreme Court Judge Jill Konviser rebuffed the attempt by Kang Gao to quash the criminal action against him in the pretrial stage, she granted his request to cut his $500,000 bail in half. “This case isn’t precisely what it was billed initially when it was brought before me,” Judge Konviser said during a hearing in Manhattan. She said there had been issues raised of organizations in China receiving Two Sigma’s formulas or trading models, on which her previous ruling on Gao’s bail was based. “There’s nothing to that extent in the grand jury minutes, but I will accept the people’s representation that there was a discussion with someone over there,” the judge said. Gao, 29, who has been in jail for eight months since his arrest, is accused of using a remote-access device to view Two Sigma’s confidential trading models and emailing this information to his personal email account, lifting quantitative trading strategies, trading models, a marketing presentation and a scientific white paper. The fund bars its employees from taking or disclosing any of its proprietary computer, scientific and financial market modeling information, according to the government. Gao’s attorney, Marc A. Agnifilo of Brafman & Associates, disputes the notion that his client made off with valuable proprietary information, saying the alleged intellectual property at issue actually consists of two now out-of-date trading models that Gao himself developed and an algebraic paper on how you crunch numbers in a certain matrix based on the work of the early 20th-century mathematician Otto Toeplitz. “To keep a guy in jail for the equivalent of a year for essentially taking his own stuff, the product of his own creation, just seems draconian,” Agnifilo said. He said the elephant in the room is that Gao is a Chinese national and that his contact with his family and others in China has been unfairly used to justify his detention. “There’s certain things the Chinese government may or may not do, and I think it’s bleeding over into this case,” he said. A spokeswoman for Manhattan District Attorney Cyrus R. Vance declined to comment. Previously, prosecutors have said high bail for Gao is appropriate given his past travel to China, his talk of setting up an investment business there and evidence that he intends to move back, despite the fact he has surrendered his passport. Judge Konviser has also ordered further hearings regarding probable cause for Gao’s arrest as well as on statements he made to the police. The ruling is the latest development in a series of high-profile trade secrets enforcement actions brought by Vance’s office in recent years. Gao's case in particular has drawn criticism about whether financial firms were going to far by pushing for the arrest of workers in trade secrets disputes. Vance has targeted former Goldman Sachs Group Inc. programmer Sergey Aleynikov, who served nearly a year in prison on federal charges before the Second Circuit overturned his conviction, only to be brought up again on state charges. In June, a New York state judge threw out physical evidence and statements Aleynikov made to the FBI in the case accusing him of stealing the bank’s computer code, finding he had been illegally arrested and his property improperly seized by prosecutors. Vance also brought charges last year against former traders for a Flow Traders BV affiliate and an associate for scheming to steal the Dutch trading house’s proprietary software and set up their own shop. In July, another New York judge found those charges to be sufficient to proceed to trial. Gao is represented by Marc A. Agnifilo of Brafman & Associates PC. The government is represented by Assistant District Attorney David Neeman. The case is New York. v. Kang Gao, case number 00640-2014, in the Supreme Court of the State of New York, County of New York. --Editing by Brian Baresch.
这个算旧闻了: http://www.zhihu.com/question/22806529 里面有不少讨论。 http://www.bbc.co.uk/zhongwen/simp/world/2015/02/150224_us_chinese_crime_trial 不过话说回来，Two Sigma里的华人真不少呀。
抢他的人无非是想一窥Two Sigma的交易模型，可他要是手上真有核心技术就不用反编译东家的程序了。他弄到手的代码都读过吗? 每行每个参数都懂吗? 不懂有啥用呀，最重要的不是代码本身而是模型，要是对模型不完全了解谁敢用。另外，金融行业背景是否清白也很重要。