Federal prosecutors have filed an unusual request in the case against former programmer Sergey Aleynikov - they want the courtroom cleared. As in, no outside witnesses. No press, no gallery, and they've also requested that all records of the trial be sealed.
The bar for clearing a courtroom can be high, said Sandra McCallion, aspecializing in trade-secret cases for the New York law firm Cohen & Gresser LLP. The government has to show that "this is something that is so secret that it will cause harm to [Goldman] if it were made public," she said.
For those who need a reminder, this is the guy accused of stealing part of Goldman's "Doomsday Machine", a black box for high-frequency . Apparently, the government is so afraid that details of the code or the strategy behind it might damage that they've filed the above request.
High-frequencyis in the news a lot these days. It was recently revealed that makes up as much as 70% of the market volume some days and that the average position is held for 11 seconds. This, and the fact that some in the world are privy to inside information about sizable trades microseconds before they're executed, has caused many investors to cry foul.
Defenders ofargue that they provide liquidity to the markets, and that without them there would be enormous bid-ask spreads. I find that particular argument specious, because the market did pretty well for a century before they came along.
However, I think it's naive to think thatisn't here to stay. Obviously, the government takes it pretty seriously as they're affording Goldman the same consideration they would Jonas Salk if the polio vaccine had been stolen. I also think it spells the end of individual day , though, and that's a bummer.
Here's a pretty interesting analysis on the subject by Joe Saluzzi, who cautions that the current rally in the market isn't real and that it's just "high speed guys chasing each other", and he lays out a pretty good case on the damage potential of:
What say you, WSO? In favor or against ? And if you're in favor, how do you justify the insider and front running?