Why does Goldman Sachs Group (NYSE: GS) earn so much money trading equities? The answer lies in a proprietary set of secret codes that Goldman uses when making their trades. In the first quarter of this year Goldman raked in $2 billion dollars from its equity trading and is the leading trader on Wall Street. Even the venerable JPMorgan Chase & Company (NYSE: JPM) only made $1.8 billion.
Now a Russian, named Sergey Aleynikov, who previously worked for Goldman is accused of stealing Goldman"s secret codes. These codes are the property of Goldman and enables them to do high speed and high volume trades in various stock and commodity markets.
From the FBI investigation it was learned that Aleynikov had downloaded secret files to his home computer, laptop and a portable memory device. It was also learned the Aleynikov earned $400,000 a year and wanted to double his salary. He is being held in lieu of posting a $750,000 bail.
This is a classic example of the little "greed" monster that lurks all around Wall Street. Aleynikov wanted to take a shortcut to riches and found a jail cell instead of his pot of gold.
Cardinal rule number one: "never let the "greed" monster enter your psyche. It will eventually destroy you.











Reader Comments (Page 1 of 1)
7-07-2009 @ 4:19AM
kavieng said...
Whats importantt here is not that Alyenikov "stole the codes". It is what those codes contain tat any half baked defence attorney would want to subpoena. Firstly because it is at the heart of the allegations that landed this man in prison. Second it is important that it be argued that the codes if based it haas a mathematical basis may not after all belong to Goldman but to the world at large. It may not be proprietary material at all.
If you deduce all the evidence and by a process of deduction eliminate all of their (Goldmans) claims against the man, we may well find the recipe for Coca Cola and KFC and that of itself may cure the millions of ailments worldwide courtesy of their 'secret recipies' which conveniently allow them to circumvent FDA laws.
Similarly as an analogy Goldman like the other "great traders till caught" should be compelled to disclosure of the widest possible extent as it is the SEC and other regulator's failure to do so that has caused the crashes and frauds of our time.
Gopal
7-07-2009 @ 2:57PM
Iridium said...
Why does Goldman make so much money?
That is the easiest question to answer in the history of time. They cheat and manipulate the market. Their computer program works by seeing small fluctuations in the market and following them with automatic large investment transfers which drives the price up. Then the program sells off at set level of profit and automaticaly enters a short position to gain profit from the selloff. The trading program is automated and has the power to move billions in fractions of a second.
All of this is done in very short time periods causing the $1-$2 fluctuations in the price of a stock during the day. Ever wonder why a certain stock goes up by 5% at 11:30 and then drops 3% by 1:30 only to go back up 6% by $3:30. That's Goldman's trading program. A 2-3% gain added together a few times a day, every trading day of the year can add up to massive profits. The manipulation goes unoticed because even a few hundred billion would get lost at the end of the day when trades are settled. When $4 Quadrillion changes hands a year what is a few hundred billion in fraudulent transactions.
Goldman's trading program should be illegal and make no mistake that Goldman Sachs rules the world. There is no organization more dangerous than Goldman Sachs. A terrorist could have a nuclear bomb in Washington and I would still fear Goldman more.
7-10-2009 @ 10:57AM
dickdeadly said...
Connie Madon writes "Cardinal rule number one: "never let the "greed" monster enter your psyche. It will eventually destroy you."
Is this in reference to Serge or Goldman Sachs?
7-10-2009 @ 11:15AM
dickdeadly said...
Iridium, in the beginning of Stanley Kubrick's "2001: A Space Odyssey," the apes that first picked up bones and used them as weapons were able to take over the territories of the apes that were not as quick to use the environment to their advantage.
You say "Goldman's trading program should be illegal" but isn't their lightning fast program just evidence of a "bigger stick?"
In other words, I would like you to present evidence why Goldman Sachs' code should be illegal.
Furthermore, remember that from bones to nuclear weapons, once one entity picks them up, it's only a matter of time before a rival entity learns from this and does the same. Does not the leak and possible dissemination of the code simply mean that other entities will use such a code to their advantage?
Or does the code become useless once more than a single entity is using it?