A programmer at hedge fund Citadel has been arrested over the alleged theft of key algorithmic trading software code from the company.
Yihao Pu, known as Ben Pu to his colleagues, has been charged with theft of trade secrets, and faces trial in a Chicago court. If found guilty, he could face anything up to 10 years in prison.
Pu had been working for Citadel in the northern US city since May last year, and is alleged to have bypassed security checks using his systems knowledge. He has not decided whether to contest the charges.
Pu allegedly downloaded 'building blocks' of algorithmic code, which are known as 'alphas', potentially to take elsewhere. US attorney for northern Illinois, Patrick Fitzgerald, said in the complaint that Pu could have used the code with significantly negative consequences for Citadel's profit making.
The complaint cites unusually large downloads from Citadel's systems to Pu's own computers and removable devices, according to the Financial Times.
A 'friend' of Pu also stated that he disposed of Pu's hard drives, at the programmer's request. The hard drives were thrown into sewage water in a Chicago canal.
In March, former Societe Generale trader Samarth Agrawal was sentenced to three years in prison after being found guilty of stealing the bank's secret algorithms. Three months earlier, ex-Goldman Sachs programmer Sergey Aleynikov was also found guilty of stealing code, in an unrelated incident.