Goldman Sachs employee charged with software theft.

DiggerUK

I don't know the first thing about this kind of programming software.
It has obviously got Goldman Sachs in a tizz.

Having an edge is how The Masters Of The Universe make their loot.
But after the Quants got their calculus wrong in the derivatives screw up, I'm questioning if it is more than likely that it's dirty laundry they are interested in hiding, not their secret to trading profitably.

Anybody here shed some light on what this is all about.

http://www.bloomberg.com/apps/news?pid=20601103&sid=axYw_ykTBokE#

Many thanks.

John_Gray

Not quite sure of the relevance of theft in America to a technical forum in the UK?

dogmaryxx

John_Gray wrote: »

Not quite sure of the relevance of theft in America to a technical forum in the UK?

Take no notice Digger,he would be lost without his

DiggerUK

I hoped it would be evident that I was after information about the technical details of this area of programming.
Even if it means sending me off an a linked article that can help fill in the details of the world these people operate in would be helpful.
Programming to techies means something far more detailed than me realising that programmes exist.
An insight into something I know nothing about is what I'm after.
Any help welcome.

fwor

I guess if someone were to exploit what's allegedly been stolen to cause serious harm to the US markets, it wouldn't take long for us to feel the effects over here.

GS have to accept that if they use computers to do trading on their behalf, then if someone figures out how the software makes decisions, they can predict in advance what trades will be made, and use that knowledge to their advantage. But that's been true for years anyway.

Do you know that the screw up you refer to was a problem with the models they use? It's not my field of expertise, but I'd hazard a guess that it's more likely to have been errors of input and the interpretation of output than the underlying models - but either way I doubt we'll ever know.

DiggerUK

Fwor,
As I can still recall some of my calculus from school, it was quite intriguing to follow the history of the quantitative economists who screwed up in the derivatives fiasco, which has led to the financial meltdown we are now experiencing.
As nobody had a clue what the Quants were up to, but went along with what they were saying anyway, I am suspicious of the real reason behind the G.S. frenzy as they go after this guy.

I'm not a supporter of conspiracy theories, so what I'm looking for here is the smoking
cuck-up.

Maybe there isn't one, could be the guy is just a thief.

ABH_3

It's just the Americans trying to find someone to blame for all of this. He's obviously gotten hold of the code that manipulates the chosen algorithms. The problem however is that they consider it UNFAIR that anyone but THEMSELVES should have access to this information. as afterall they only manipulate the market for the good of their investors\America and the WORLD! Only after the appropriate 'nods' and 'winks' from the 'chosen ones' however.

Now the secret is out, we've got to find someone to blame for this, then secure the code and ensure it doesn't cause a bout of 'financial terrorism' - that would be where anyone else makes money out of this, but us the chosen few!

HTH

Woby_Tide

If GS have a trading model/algorithm they use for playing the markets to their advantage then they probably are just !!!!ed off that the intellectual rights to that have been lost, plus the fact that if other banks/institutions use it at the same time then it will likely negate any benefit they may have got from it.

Plus it's just a handy PR exercise to put the fear up their staff and of other banks should they think about doing the same

DiggerUK

WT,
Yes, simple explanations are usually a good formula.
Like a paperclip, they are uncomplicated when you realise it is just a straight line that needs to be followed.
Thanks.

fwor

Woby_Tide wrote: »

that the intellectual rights to that have been lost

Sorry, but I don't understand that comment.

Even if the allegations are true, how could any intellectual property have been lost?

Someone who steals someone else's previously provably existing code can't hope to also steal the IPR's, or am I missing something here?

[Edit: "previously provable existing code" doesn't scan too well, but what I mean is that if GS can prove that they created the original code/algorithms, then the thief has no claim to any IPRs]

RobTang

ABH wrote: »

It's just the Americans trying to find someone to blame for all of this. He's obviously gotten hold of the code that manipulates the chosen algorithms. The problem however is that they consider it UNFAIR that anyone but THEMSELVES should have access to this information. as afterall they only manipulate the market for the good of their investors\America and the WORLD! Only after the appropriate 'nods' and 'winks' from the 'chosen ones' however. ...

The thing is lets say you have spent hundreds of thousands maybe millions of pounds developing ...lets say the best cake recipe in the whole wide world, then somthing comes and steals it, you're not going to happy are you ? and your definatly not going to noitce anyone who thinks its unfair that you kept the recipe to yourself all this time.

Just to press the point I think its UNFAIR that you keep all your bank/credit/debit card details to YOURSELF, why should you be the only one to access your money, im sure someone somwhere (ie me) could put it to better use than you!

Now while this sounds silly, im just trying to point out that even evil money grabbing banks have the right to privicy for their private information, you have no right to it just because you think you do.

Besides markets are inherently volatile, and theres no real gauge wether their program really works or not (presumably they wouldn't have lost so much if it was really good) Its not some sort of master program that ensures you win every time.