Harsh Justice for a Wall Street Thief

A thief who stole from Wall Street, of course

David Weidner has an excellent column on the unfortunate case of Sergey Aleynikov, better known as the guy who stole computer code from Goldman Sachs.

Last week, a federal judge handed Aleynikov got eight-plus years in prison for the theft. The fact is, Aleynikov is a thief, and Weidner makes sure you know he’s not minimizing that fact. But he contextualizes it, and it’s enlightening:

On March 18, the same day that U.S. District Judge Denise Cote handed down Mr. Aleynikov’s sentence of eight years and a month in prison, a different judge sent William J. Cannon, 22, of Ukiah, Calif., to prison for seven years. Mr. Cannon was convicted of the attempted rape of a 16-year-old girl.

Rodney Williams, 42, was convicted of voluntary manslaughter in Norfolk, Va., for shooting his victim eight times in a fight outside a sports bar, got 12 months in prison and a $2,500 fine.

Weidner also notes that a Societe Generale code thief got a three-year sentence recently.

The lesson: While nobody on Wall Street has gone to jail yet for the financial crisis, justice is swift and severe if you pilfer from Goldman Sachs. Even if the theft was “very, very immaterial,” according to Goldman’s own CFO.

It’s particularly good that Weidner covers this since the Journal’s news coverage of this story was underwhelming. Its only piece on the sentence was less than 400 words of wire copy stuffed on B5 and didn’t note that Aleynikov’s tough sentence was four times the length probation officials recommended.

Weidner also makes a smart comparison between the fortunes of Aleynikov and those of former Goldman board member Raj Gupta:

It’s one thing to under-sentence dangerous criminals, quite another to over-sentence white-collar criminals and even more outrageous to prosecute little fish when the big fish swim away fat and happy.

Case in point: The Securities and Exchange Commission has alleged in a civil proceeding that former Goldman director Rajat Gupta passed to his friend, Galleon Group’s Raj Rajaratnam, non-public information about Goldman.

Mr. Gupta hasn’t been charged criminally, raising eyebrows in the securities-law community.

In other words, a prole (relatively speaking) steals from Goldman and doesn’t profit: Eight years in the clink. A Goldman board member steals from Goldman and helps his crony make millions: Eh.

Which leads to the kicker:

But if Mr. Aleynikov decides to do it again, he should reconsider the computer programming bit. These things are better done from the top. Landing a spot on the Goldman board might be a good start.

Well put.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum. Tags: , , , ,