Goldman Sachs and the war on (loose) code
Loose nukes code is fast becoming an object of national security. Like their industrial cold war predecessors, code has been framed as the informational equivalent of a loose nuke — potentially capable of obliterating markets and governments if obtained by a rogue state hacker. This growing meme has been furthered most recently by the news of an ex-Goldman Sachs computer programmer who allegedly circulated proprietary trading code:
Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said…
At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.
According to Reuters, who broke the story:
Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.
Aside from its entertaining similarities with the 1997 film The Spanish Prisoner, I find this news story particularly interesting b/c of the way it brings into focus 4 interrelated phenomena:
- Automated trading software has become a prominent actor in the manipulation of national and global markets.
- Corporate propertization of code has become a strategy for shaping such manipulation (cf. 1) according to its own economic interests.
- Government has engaged in globally policing proprietary code to ensure that the informational restructuring of the economy (cf. 1 & 2) continues to favor current power-holders.
- Individuals within the informational work force have emerged as potentially destabilizing actors in informational restructuring (cf. 1 & 2) and are thus becoming objects of national cybersecurity (cf. 3).
As Jon Stokes over at ars technica argues, the US government and Goldman Sachs aren’t concerned that this proprietary trading code could manipulate the market (that’s exactly what it’s designed to do) — they’re concerned that if this code gets “loose” it could challenge Goldman’s standing as a primary market manipulator. Whether these allegations turn out to be true or not, what’s apparent is how this event has been framed as a “wake up call” (as a former chairman of the U.S. Securities and Exchange Commission put it) for financial institutions to acknowledge the importance of their code by enhancing efforts to lock it down. This, naturally, requires greater government and private policing of informational borders, and greater surveillance of the individuals who interact with intellectual property in order to mitigate the potential power of certain informational workers.
