Backbytes: Wall Street's crackdown on, err, software engineers

Software engineer? Work for a hedge fund? Want to move to another one? It'll be JAIL time for you, Sonny-Jim

High-frequency trading, where the privileged elite get to profitably trade stocks in micro seconds using mathematical algorithms, is big business, accounting for between half and three-quarters of all US equity trading by volume.

Across the City of London and Wall Street, entire firms are dedicated to leveraging their special access to the stock market and other exchanges in order to turn a profit in the blink of an eye.

But woe betide any software developer that works in the sector who wants to hop from one firm to another: what they have in their head, as far as the hedge funds are concerned, is their proprietary intellectual property, and taking that know-how to their next employer could get them arrested.

Take Kang Gao, for example. His routine "exit interview" with employer Two Sigma Investments ended in his arrest when investigators at the Manhattan District Attorney's Office swooped with impressive speed at the behest of Two Sigma, who have accused him of stealing their trade secrets, according to Bloomberg.

In addition to throwing him in jail pending prosecution, prosecutors also froze his bank account for good measure, so regardless of whether he is found guilty or not, his life has already been flushed down the toilet by the US criminal justice system.

And he is at least the fourth software engineer to get whacked on charges of "intellectual property theft" - merely for having the temerity to move from one employer to another.

Of course, in the old days when stock and commodity trading was done by real human beings who placed orders with other human beings, their client lists, Rolodexes and trading strategies were never subject to such draconian intellectual property laws.

But in the land of the software patent, it isn't the software developers that are king.

Indeed, in view of everything that has happened on Wall Street over the past decade or so it seems peculiar that it is software developers, moving from one job to another, that are the ones being arrested and jailed.

@backbytes