THE ARREST of Sergey Aleynikov, a former Goldman Sachs employee at the centre of a criminal case involving the unsanctioned downloading of sophisticated trading software codes, has thrust the largely unglamorous world of computerised equity trading into the spotlight.

Mr Aleynikov (39) had just started work at Teza Technologies in Chicago, a start-up founded by a former trader with the Citadel hedge fund, when he was arrested on Friday and accused of theft of “trade secrets” and the transportation of those “secrets” to a computer server in Germany.

Mr Aleynikov maintains his innocence and is free on $750,000 bail. According to court documents, he does not appear to have transferred any of the downloaded codes to his new employer.

At a hearing in New York federal court on Saturday, assistant US attorney Joseph Facciponti argued that the Mr Aleynikov’s actions could harm Goldman and the capital markets.

“The bank has raised the possibility that there is a danger that somebody who knew how to use this programme could use it to manipulate markets in unfair ways,” the prosecutor said, according to Bloomberg.

“The copy in Germany is still out there, and we at this time do not know who else has access to it.”

Richard Bove, an analyst with Rochdale Securities, says the incident “highlights the importance of technology to Goldman Sachs”. The bank “developed control systems that exist nowhere else in the world. There are more people involved in information technology at Goldman Sachs than in any other pursuit. The company has more IT personnel than it has traders or investment bankers.”

Mr Aleynikov has been placed on leave of absence by his new firm, according to Bloomberg. – Copyright The Financial Times Limited 2009