(Bloomberg News) -- Former Goldman Sachs Group Inc. programmer Sergey Aleynikov was found guilty in the high-frequency trading code theft case that illustrated the difficulty of using existing law to protect technology central to financial markets.

Aleynikov, whose travails helped inspire Michael Lewis’s “Flash Boys,” acknowledged that he breached Goldman Sachs policy by downloading the code to his home computers. While Aleynikov’s attorney, Kevin Marino, argued that taking the code wasn’t illegal even if it violated bank policy, jurors decided it was a crime.

A jury in New York state court Friday convicted Aleynikov of illegal use of secret scientific material while acquitting him of illegal duplication of computer-related material.

Courts are struggling with the application of laws to computer technology, said Stephen McJohn, a professor at Suffolk University Law School in Boston. Judges and juries rely on statutes that didn’t contemplate present technology, he said.

It shows how “in a day when software and data can be the key assets of a business, how easily they can sometimes be spirited away,” McJohn said before the verdict. “The publicity will likely spur at least some businesses to check their security programs.”

No Decision

Jurors couldn’t reach a decision on a third count -- also for unlawful use of secret scientific material. Both sides agreed to discharge the jury without further deliberations.

Aleynikov declined to comment after the partial verdict was read.

Michael DuVally, a Goldman Sachs spokesman, had no immediate comment on the verdict.

New York Supreme Court Justice Daniel Conviser can set aside the guilty verdict. Aleynikov’s lawyers sought to have the indictment dismissed. Conviser said he would rule on the request in the next five to six weeks.

The jury panel was reduced to 10 from 12 on April 29 after Conviser tossed two members involved in a dispute that disrupted deliberations for a day.

A female member of the jury complained that one of the men was conspiring either with the prosecution or defense to poison her lunch, according to the judge.

No Basis

“There is no basis in reality for her to believe he is poisoning her,” Conviser said. The juror leveling the claim had said she wasn’t feeling well and that her thoughts weren’t coherent, the judge said.

Earlier, the jurors showed their confusion by repeatedly seeking clarification from the judge.

On April 24, along with having the charges read out loud multiple times, including once when they directed the judge to read “slowly,” they also requested definitions of “tangible” and “major economic benefit.”

The judge read dictionary definitions to jurors of the word “tangible,” which he said could serve “as guideposts.”

Aleynikov’s attorney has disputed whether the code qualified as “tangible” and questioned how significant the value was to Goldman Sachs.

Jury Struggling

Prosecutors resisted providing jurors with a written copy of the charges, but Conviser said he would give them copies. “It’s become obvious to me” they were struggling, he said.

“I have no doubt this is very difficult for you without having written instructions,” the judge said.

On April 27, defense lawyers expressed frustration as the jury repeatedly sent notes to the judge asking for definitions of specific words and the transcript of testimony about specific computer files. Conviser said he wouldn’t attempt to rush the jury.

This isn’t the first time Aleynikov has faced charges for downloading the Goldman code. Arrested in 2009, he was found guilty by a federal jury in New York, and sentenced to eight years in prison.

That verdict was overturned in 2012 by the U.S. Court of Appeals in New York. The federal laws Aleynikov was convicted of violating, the Economic Espionage Act and the Interstate Transportation of Stolen Property Act, didn’t apply to his case, the court ruled.

Six months later, Manhattan District Attorney Cyrus Vance Jr. charged him under state laws prosecutors argued were a better fit.

Marino argued the charges aren’t justified under state law because the copies made by Aleynikov didn’t qualify as tangible and Goldman Sachs didn’t lose the major economic benefit of the code.

Firms Protective

Wall Street firms have become increasingly protective of software code and trading models as they seek advantages over rivals through strategies including high-speed trading.

Aleynikov was the first of a group to be charged by Vance with stealing intellectual property from financial firms. Kang Gao, a former analyst at quantitative hedge fund Two Sigma Investments LLC, pleaded guilty in February to taking that firm’s data in return for a 10-month jail term.

Gao’s plea came a day after Jason Vuu, of San Jose, California, was sentenced in the same court to five years’ probation. He was charged with stealing computer source code and strategies from Flow Traders, an Amsterdam-based trading house.

Vuu was charged by Vance in 2013 along with another ex-Flow Traders employee, Glen Cressman, of Fort Lauderdale, and Vuu’s former roommate, Simon Lu, of Pittsburgh. Cressman pleaded guilty in December, and Lu pleaded guilty in March.

FBI agents arrested Aleynikov at Newark Liberty International Airport in New Jersey in July 2009. He was returning from Chicago, where he had taken a job with Teza Technologies LLC -- a company founded by former Citadel LLC high-frequency trading chief Misha Malyshev.

Aleynikov Fired

Teza suspended Aleynikov after his arrest and later fired him.

Despite the conviction, Aleynikov’s saga may make prosecutors think twice before bringing such cases, because the elements of proof are more difficult than in a lawsuit, said Sharon Sandeen, a law professor at Hamline University in Saint Paul, Minnesota.

Those added requirements include proving criminal intent, she said.

“I do not fall in the camp to say criminal prosecutors shouldn’t look at these cases and they should just be totally decided civilly,” Sandeen said. “The camp I’m in is if they look at it and they can’t prove those heightened elements, they shouldn’t pursue it.”

During deliberations, Marino noted to the judge in an aside that “this is really an unusual criminal case.”

Conviser responded: “That’s for sure.”

The case is New York v. Aleynikov, 04447-2012, New York State Supreme Court, New York County (Manhattan).

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