Sergey Aleynikov launched the complaint in New Jersey federal court, marking yet another twist in his ongoing legal saga. He was convicted in December 2010 on federal charges and served nearly one year in prison before the Second Circuit overturned the conviction in February. New York prosecutors said in August they were weighing whether to charge Aleynikov for violations of two state felony statutes, with a formal indictment expected as soon as this week.
Now Aleynikov is looking to Goldman for help in paying legal fees from both the federal and state cases. The instant suit claims that Aleynikov has “exhausted his financial resources” and is entitled to reimbursement under Goldman’s corporate bylaws, which require the firm to cover legal expenses for current and former officers.
Aleynikov — who held the title of vice president in Goldman’s equities division between May 2007 and June 2009 — says he falls into that category.
“Unless the court orders Goldman Sachs to honor its legal obligation to advance his legal fees and expenses to defend the state charges, Aleynikov’s ability to defend those charges will be irreparably harmed,” the complaint said. “Given Aleynikov’s complete exoneration on the federal charges, his right to indemnification for his legal fees and expenses to defend those charges is equally clear and also ripe for summary disposition.”
The suit seeks $2.4 million for fees stemming from the federal case, in addition to unspecified fees from the state case and the present suit.
Goldman spokesman Michael Duvally declined to comment Wednesday.
Aleynikov programmed for Goldman from 2007 to 2009. He allegedly took code from the firm's high-frequency trading system, a computer program that allows Goldman to make split-second trades in securities, commodities and options.
Prosecutors say he took hundreds of thousands of lines of code June 5, 2009 — his last day at a $400,000-a-year job at Goldman — for use at his new executive position at Chicago-based Teza Technologies LLC, which paid $1 million annually.
He was convicted in December 2010 and sentenced to eight years and one month in prison, but that conviction was overturned after the Second Circuit found he had not stolen a good or product intended for interstate commerce, as federal law requires.
Aleynikov’s attorney Kevin H. Marino said he planned to argue that the state case was a clear example of unconstitutional double jeopardy.
The criminal complaint that state prosecutors lodged was filled out by Michael McSwain — the FBI special agent who was behind the federal case against Aleynikov — and Second Circuit precedent says a follow-up prosecution is double jeopardy if a state is acting as a tool of the federal government, according to Marino.
Aleynikov is charged with a count of unlawful use of secret scientific material and unlawful duplication of computer related material. The two felonies carry maximum sentences of four years in prison.
Aleynikov is represented by Kevin H. Marino of Marino Tortorella & Boyle PC.
The case is Sergey Aleynikov v. The Goldman Sachs Group Inc., case number 2:12-cv-05994, in the U.S. District Court for the District of New Jersey.
--Additional reporting by Richard Vanderford. Editing by Eydie Cubarrubia.