The trial of Serge Aleynikov lasted 10 days and was notable for its paucity of informed outsiders. High-frequency trading is a small world, and the people who do it, or know anything at all about it, apparently have far less interest in testifying at trials than in making their personal fortunes. The one outside expert witness on the subject called by the government, a professor at Illinois Institute of Technology named Benjamin Van Vliet, had never actually done any high-frequency trading himself and had little to add on the value or the gist of what Serge had taken. About the market itself he was badly misinformed. (He described Goldman Sachs as “the New York Yankees” of high-frequency trading.) He turned out to have testified as an expert witness in an earlier trial involving the theft of high-frequency-trading code, after which the judge had described what he’d said as “utter baloney.”It reminds me of the judges' actions in the Anderson v. Cryovac case, which was the basis for A Civil Action. In it, a judge ignored test evidence that indicated that groundwater migrated under the river to the city's wells, because, hey, the river was there. If recent criminal cases on Wall Street are any indication, the more boring and technical the evidence, the more likely crooks will get away. In this case, a potentially (according to the accused, and Lewis) innocent man is imprisoned because the details were too complex for the jury.
The jury consisted mainly of high-school graduates and lacked anyone with experience programming computers. “They would bring my computer into the courtroom,” recalls Serge incredulously. “They would pull out the hard drive and show it to the jury. As evidence!” Save for Misha Malyshev, Serge’s brief employer, the people who took the stand had no credible knowledge of high-frequency trading: how the money is made, what sort of computer code is valuable, etc. Malyshev, who’d been subpoenaed as a witness for the prosecution, testified that Goldman’s code was of no use whatsoever in the system he’d hired Serge to build—he insisted that it had never been his plan to import code from anywhere because he wanted to build Teza’s system from scratch. He wanted something flexible and fast, that he could continuously upgrade. Even if offered Goldman’s entire high-frequency-trading platform he would not have been interested—but when he looked over he saw that half the jury appeared to be sleeping. “If I were a juror, and I wasn’t a programmer,” says Serge, “it would be very difficult for me to understand why I did what I did.”
Tomorrow, Vanity Fair will post part 2 of the story.
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