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Federal Appeals Court Says Taking Source Code Not a Federal Crime

On Wednesday, in another big setback for companies fighting computer-related fraud, the 2nd U.S. Circuit  Court of Appeals in New York threw out the conviction of a former Goldman Sachs Group Inc. computer programmer. After a December 2010 conviction for stealing a secret high-frequency trading computer code from Goldman Sachs,  Sergey Aleynikov served 11 months of an eight-year prison term. In the decision released Wednesday, the 2nd Circuit Court cited that the taking of source code was not a crime under a 1996 law that makes it illegal to steal trade secrets as the code did not qualify as stolen goods. In the decision, Chief Judge Dennis Jacobs wrote for the unanimous three judge panel: “We decline to stretch or update statutory words of plain and ordinary meaning in order to better accommodate the digital age.” Read more

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