Ex-Susquehanna Engineer Arrested For Trading Code Theft
The FBI nabs a market maker’s ex-engineer trying to swipe codes.
You can’t outrun the long arm of the law – even on Wall Street.
When it comes to trading code and zeroes and ones – firms are hyper-secretive about the coding and methodology that make up their secret trading sauce. And when one of the cooks of the secret sauce leaves, it raises just concerns about how secret the sauce remains and what can be done to keep those herbs, spices, syrups or algorithms safe. Firms need their trading sauce to be kept secret and secure, else they might become the next New Coke or McDLT.
As first reported in Forbes, a high-frequency trading software developer was charged last Thursday by Joon Kim, the acting U.S. Attorney in Manhattan, with attempting to steal quantitative trading code from Philadelphia-based Susquehanna International Group. The firm specializes in making markets ffor options.
Dmitry Sazonov, 44, who worked for Susquehanna International Group for 13 years as a software engineer, was arrested in the lobby of Susquehanna’s New York offices on Wednesday by agents of the Federal Bureau of Investigation.
According to the criminal complaint, Sazonov tried to steal source code linked to an updated trading platform Susquehanna has been developing for years to generate exchange and market orders. Sazonov started his effort to steal the proprietary trading code in February, the complaint says, after learning his supervisor had resigned.
According to government complaint, the trading platform Sazonov worked on trades $300 million in options daily.
Forbes reported that federal prosecutors claim that Sazonov, fearing he would be fired, downloaded the source code to his company computer and deployed a computer program that may have used steganography to break up data and hide data within other files, including personal tax and immigration documents. Sazonov attached zip files containing the quant trading code to two saved emails addressed to a personal account, but he was fired and immediately escorted out of Susquehanna’s New York offices in February before he had a chance to send the emails, the complaint says.
The FBI and government say Sazonov kept asking to get his personal computer files back from his corporate computer and showed up on Wednesday afternoon in the lobby of Susquehanna’s New York offices thinking he was going to have them returned. There, an FBI agent pretending to be a Susquehanna employee handed Sazonov a disk and he was arrested, federal prosecutors say.
Federal prosecutors and Susquehanna did not respond to Forbes’ calls and emails requesting comment.
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