Former Goldman Sachs trader refuses to return stolen trade secrets 

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A former Goldman Sachs banker who stole his employer’s trade secrets has ignored an order to surrender them, in order to cash in on profits after his release from prison, a London court was told.

Jurors at Southwark Crown Court heard Ke Xu, a Cambridge maths graduate, “deliberately” refused to surrender software worth millions of pounds that he seized from his former employer, Trenchant Trading Systems.

Xu, who worked as a quantitative analyst writing trading strategies for Goldman Sachs, allegedly utilise his computer skills to gain possession of algorithmic codes used to trade the markets.

James Lewis QC told the court Xu admitted “dishonestly accessing and analysing his employer’s trade secrets” and he had since “deliberately disobeyed the court’s order” to return the stolen code and computer.

“In this case they were trading strategies and he did so with a view to making himself a very rich man by taking those secret strategies to rival firms,” said Lewis.

“He was sentenced to four years’ imprisonment, but in addition to the prison sentence this court ordered him to cooperate with the police in the return of those trading strategies and the computers he used to access his employer’s systems. He hasn’t done so.”

Xu resigned from Trenchant Trading Systems in August 2014, after growing unhappy at receiving a bonus of £400,000 the previous year on top of his £85,000 salary, as he believed he was entitled to a return north of £1m.

Following his resignation, he flew to Hong Kong carrying with him confidential codes and sought to be hired from another financial services firm, only to be arrested and extradited back to Britain in December 2014.

The 32-year-old was subsequently jailed seven months later after admitting of committing fraud by abuse of position but, if found guilty of ignoring the court’s orders, he faces a longer sentence than the four years he is currently serving.

Xu has rejected five counts of failing to comply with a Serious Crime Prevention Order and insisted he never took copies of the codes. The court was told he handed his computer to his family, before it was lost after his parents’ home was burgled.

Xu graduated with a first-class degree in maths from Cambridge University

“Mr Xu has tried to hang on to those secret trading strategies so they are there for him when he is released from prison and returns to China,” Lewis told the court. “Mr Xu was ordered to tell the police where the copies of Trenchant’s trade secrets he made were and to hand those copies back and also to hand over the related computer equipment.”

Lewis added Xu had “completely failed to comply” with the court’s order. “He says he can’t hand back copies of the trading strategies because he never took copies,” he added. “As for the computer equipment, he says he no longer has it, claiming he handed it to family members in China.”

The jurors would have to decided on the future of Xu, who graduated with a first class degree in maths from Cambridge, Lewis argued. “Did Mr Xu keep any copies of the company’s secrets, namely those trading strategies in the form of computer code?” he said.

“And secondly, does he have a reasonable excuse for not surrendering to the police the computer equipment he had used to access the company’s code?”

The trial continues.

Source: IBTimes UK

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