New York prosecutors reportedly filed charges against a Two Sigma Investments LLC employee for stealing computer data from his employer.
Kang Gao was also sued by Two Sigma this month after he resigned, and that according to the complaint filed in the New York state court in Manhattan, Gao had been arrested. A person familiar with the case said that Gao was criminally charged by District Attorney Cyrus R. Vance Jr on February 11 in a Manhattan court.
Bloomberg said the lawsuit filed by Two Sigma revealed that Gao's employer found that its former employee had misappropriated private information, which was part of an alleged plan to bring the stolen information to either one of the competitors of the 18 billion quantitative hedge fund in the UK or start a new venture in China. Gao reportedly gained access to the information by using decompiler programs to be able to view confidential financial models that are normally hidden from some of its employees and sent them to his personal email account. Two Sigma also claimed that Gao had kept the information on insecure servers despite the fact that he had drawn up a written confirmation that he had destroyed the information.
The news agency said Gao has been criminally charged with one count of unlawful duplication of computer-related material, one count of unauthorized use of secret scientific material, one count of criminal possession of computer-related material and two counts of computer trespass. According to the New York City Department of Corrections, Gao is currently incarcerated in the Manhattan Detention Complex in lieu of a $500,000 bond or a $150,000 cash bail as he awaits for his next appearance in court on March 11.
Bloomberg said the latest development indicated a growing number of proprietary theft cases in financial firms that had been brought by the district attorney of Manhattan. Earlier, Vance had slapped similar charges against ex-employees of Flow Traders for obtaining their employer's electronic trading software illegally. In 2012, former Goldman Sachs Group Inc. programmer Sergey Aleynikov was charged with proprietary software code theft. All of the four individuals charged reportedly submitted not guilty pleas.
