Did Serge’s underwater house play a role?

Ok, ok, everyone has been buzzing about how Serge Aleynikov stole some code from GS. For those who don’t know the story, google it or read the Reuters story. But I’ll sum it up for the lazy ones. Serge was a VP at GS, and before he resigned in June, he downloaded some code and sent it off to somewhere in Europe. GS realized this and had him arrested by the FBI over at Newark Airport for stealing trade secrets.

Oh, quick note to the journalists out there, it is “code” and not “codes” that he stole. The plural of code in this context is code. We’re talking about source code and not the secret nuclear missile launch codes.

Anyway, I was curious when it mentioned that he lived in North Caldwell. Always like to see what kind of digs these high-end GS hackers live in. For those outside of this area, North Caldwell is considered a relatively prestigious town. Non-Jerseyans might recognize it as the town Tony Soprano lived in.

Well, I didn’t find any tax record pointing to a person with that name owning property in North Caldwell (he might rent, or have very recently purchased), but I did find a tax record pointing to a property owned in Little Falls.

Turns out that Serge bought a house during the bubble and has been unsuccessfully trying to unload it for almost a year now.

Looks like Serge purchased the Little Falls house in September of 2004 for $600,000.

The first listing, MLS# 2568742, came on the market in August of 2008 for $689,000. This one was reduced to $629k before it was withdrawn at about the 6 month mark. A new listing, MLS$ 2644967, came on in February of this year, at $629k. That one was also reduced before being withdrawn. Last list price on that listing was $579,900, below with 2004 purchase price of $600k. The most recent listing, MLS$ 2689816, came on in May, at $550k, where it has sat for the past month.

Now, I won’t go so far as to posit some sort of link between these events, I’ll leave that up to you.

Update

The Aleynikov residence was also listed as being available for lease with an availability date of June 1st.

Another interesting coincidence, the complaint filed by GS mentions that they believe the alleged theft began on June 1st or thereabouts. Aleynikov left GS on June 5th or so. Was the plan to have already left NJ and moved to Chicago to take this new position? Was this in the works since last August, when the property was put up for sale?

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59 Responses to Did Serge’s underwater house play a role?

  1. Pol Clot says:

    What a POS. They should just put an ankle bracelet on this turd and let him serve his sentence in this miserable house.

  2. chicagofinance says:

    jcer says:
    July 6, 2009 at 5:19 pm
    Chi way off base on GS. In the market I would wager it is almost statistically impossible to “win” as much as they do even if they are all geniuses. They definitely cheat and I think often their clients wind up on the short end of it.

    jc: I do not want to sound flippant…but so what?

  3. chicagofinance says:

    jcer: please understand, I am not contesting the potential factual base of what Taibbi plagiarizes; it goes beyond naive and appears more like soapbox fodder for someone looking for a knob shining…and he appears to have a serial need….

  4. chicagofinance says:

    I will say another thing…..you cannot know what is occurring on someone’s book. To make provocative accusation smacks more of pathetic jealously of a dimestore put-down artist, and less of credible reporting of overt malfeasance.

    Is there crap occurring at GS…of course…don’t be stupid? To the degree and style alleged…please give me a break…

    I think Goldman’s biggest problem is more that there are a lot of people that want to work there and very few ever get the chance, and even fewer get to leave on their own terms….

  5. chicagofinance says:

    The end is nigh….

    BRANCHBURG MAN ALLEGEDLY ATTACKS WIFE WITH MEAT CLEAVER
    By REUVEN FENTON
    Last updated: 4:49 pm
    July 6, 2009
    Posted: 3:57 pm
    July 6, 2009

    A New Jersey man allegedly attacked his wife with a meat cleaver this morning after she annoyed him by sweeping while he cooked.

    The 54-year-old victim, who was not identified, was hacked in the head and arm at about 9:15 a.m. inside the couple’s Branchburg home.

    The man, who was also not named by police, was arrested, telling cops that he was cooking macaroni and hot dogs when his ex-wife decided to sweep the floor, sources said.

    When the woman brushed his feet with the broom, the man snapped and started to swing the meat cleaver at her.

    The victim was taken to Somerset Hospital in stable condition.

    The couple had been arguing about the husbands failing real estate business.

  6. grim says:

    I need to pull the most recent North Caldwell tax records to see if Aleynikov has recently purchased a house in North Caldwell.

    Unfortunately, the most recent database I have access to isn’t as current as I’d need.

  7. still_looking says:

    RE 6

    Boy am I grateful not to have been in the Pit this morning.

    sl

  8. goonsquad says:

    There’s this building in Union City that just went up called the Altessa.

    http://www.altessanj.com/

    When I look them up on Trulia, there is some funny business going on where a lot of the units are actually going up in price. I’m not considering buying, but just looking for fun. Why would they be raising the list price? My best guess is that they’re raising the price on some while lowing the prices on others so that the average asking price doesn’t drop. Would that make sense?

  9. d2b says:

    Do we know anyone in the RE business in Branchburg?

  10. Comrade Nom Deplume says:

    Tax news of the day:

    While the US penalizes business, particularly domestic multinationals, our competitors see opportunity. Here are two examples of action being taken by South Korea and India to improve business climate. Note the emphasis on foreign business. Wonder who the welcome mat is laid out for?

    “South Korea Plans to Boost Tax Deductions for Technology, Extend R&D Spending Breaks
    Posted July 6, 2009, 6:17 P.M. ET

    SEOUL—The South Korean Ministry of Strategy and Finance July 2 announced a new stimulus package aimed at boosting corporate investment and generating jobs with upgraded tax incentives for technology investments among the main programs planned for implementation over the coming months.

    Companies investing in key industrial technologies certified by the government will be allowed to treat 25 percent of their investment as deductible expenses, or 35 percent for small and medium-size companies, on top of standard deductions available for research and development. Foreign companies doing business in South Korea are equally eligible for such deduction privileges.

    “R&D activities on core technologies that determine industrial competitiveness will be given the highest level of support available” among Organization for Economic Cooperation and Development countries, the ministry said.

    The existing deduction provisions for R&D capital spending, set to expire at the end of 2009, will be extended until 2012, including a 10 percent deduction for equipment and a 3 percent for patent, design, and technology purchases (or 7 percent for small and medium-size companies).

    India’s Budget Proposes ADR Mechanism Along With Safe Harbor for Transfer Pricing

    Posted July 6, 2009, 3:46 P.M. ET

    The Indian government July 6 proposed creating an alternative dispute resolution mechanism for transfer pricing within the government’s Income Tax Department and formulating safe harbor rules to reduce errors in auditing cross-border intercompany pricing.

    The proposals, part of the government’s budget announcement, are aimed at improving India’s investment climate, the government said.

    Indian Finance Minister Pranab Mukherjee in presenting the 2009 budget said the nation needs “to facilitate the resolution of tax disputes faced by foreign companies within a reasonable time frame.” He said this is particularly relevant for companies in the information technology sector.

    Tax uncertainty in India is beginning to adversely affect inward investment into the nation, according to taxpayers, who have complained of both aggressive and inconsistent enforcement on the part of transfer pricing officers and an untenable process for resolving double tax issues.”

  11. Comrade Nom Deplume says:

    [6] chi

    The article says both wife and ex-wife. Merely a prediction?

    [10] d2b

    If it was clot, he made bail and was back to posting today.

  12. CAIBC says:

    Grim…you should work for the FBI….nice investigation…also, be prepared when GS summons you to court to have known insider information on Serge’s plans!

  13. SirRentsalot says:

    “The man, who was also not named by police, was arrested, telling cops that he was cooking macaroni and hot dogs”

    For breakfast??

  14. x-underwriter says:

    chicagofinance says:
    The couple had been arguing about the husbands failing real estate business.

    I’ll bet Clotpoll knows this guy

  15. veto that says:

    “For breakfast??”

    SirRents.
    He hacked his wife with a hatchet.
    You’d think he’d have gone with the old bacon and eggs.

  16. grim says:

    From Reuters:

    S&P raises loss expectations for risky US mortgages

    Standard & Poor’s on Monday boosted its expectations for losses on risky loans backing U.S. mortgage securities to as much as 40 percent, suggesting a darkened outlook for the troubled housing market.

    The more dire assessment will likely “significantly impact” bonds originally carrying AAA ratings, S&P said in a report.

    Increased assumptions for total losses on subprime and Alt-A residential mortgage-backed securities come amid declines in market value of the debt and a surge in the inventory of bank-owned properties, S&P said.

    It is another blow to investors who are already suffering from downgrades to their portfolios over the past two years as the housing market fell to the weakest levels since the 1930s. Many bonds are trading for cents on the dollar as investors value them based only on remaining interest payments that may be received.

    S&P boosted loss projections for subprime loans made at the peak of the market in 2006 and 2007 to 32 percent and 40 percent from 25 percent and 31 percent, respectively. For 2005 loans, loss projections rose to 14 percent from 10.5 percent.

    For Alt-A loans, which were made to borrowers that provided reduced proof of their ability to repay, loss projections for 2006 and 2007 mortgages rose to 22.5 percent and 27 percent from 17.3 percent and 21 percent, respectively. S&P expects Alt-A loans from 2005 to post losses of 10 percent, up from its previous estimate of 7.75 percent.

  17. ben says:

    How the heck did the FBI act so damn fast on this guy stealing code? I guess GS has insiders at the FBI as well. No wonder they get away with everything they do.

  18. Silera says:

    “For Breakfast”

    1- Macaroni and hot dogs are really cheap.

    2- You don’t need a meat cleaver to to make hot dogs.

  19. safeashouses says:

    #6 chifi,

    Maybe it was organic hotdogs and macaroni?

    Bottom line, you can’t mess with a man’s hot dog.

  20. Comrade Nom Deplume says:

    [6] ch

    hope for his sake, her name wasn’t Lorena

  21. DINJ says:

    I see the crash has hit everybody:
    http://www.youtube.com/watch?v=bNmcf4Y3lGM

  22. Seneca says:

    Not a comp killer per se, maybe just comp manslaughter in Westfield.

    224 Sinclair

    10/05 for 735k, undergoes total renovation
    11/06 purchased for 900k
    4/09 listed for 945k
    7/09 purchased for 879k

  23. Seneca says:

    Westfield again

    619 Raymond

    12/05 Purchased for 901,500
    3/09 Listed for 839,000 (grim could you check my work here?)
    6/09 Sold for 810,000

  24. Seneca says:

    …mas Westfield por favor,

    302 Belmar

    12/04 Purchased for 418,000
    3/09 Listed for 424,900
    7/09 Sold for 410,000

    … but they got those nice property tax deductions along the way so totally worth it, right?

  25. Clotpoll says:

    renty (14)-

    Mac and hot dogs for breakfast, yo. Wash it down with a couple shots of Knob Creek, and I’m ready for three listing appointments in a row.

    BTW, bitch had it coming.

  26. Clotpoll says:

    We were out of ketchup, so I figured the next closest thing that’s red would be her blood.

  27. RobGilpatric says:

    Grim, this is a great scoop!

  28. Clotpoll says:

    Tyler Durden is running with your story, Grim:

    Casa Di Serge
    Posted by Tyler Durden at 6:32 PM

    “And now for some evening real estate p0rn combined with a slow motion career trainwreck. Not that it matters to the Serge(y) Aleynikov estate all that much anymore, but some preliminary digging by NJREReport has uncovered pretty much most loose ends in the case of the Russian 007 that was never meant to be. First: here is the tax property detail to the 38 year old’s house. Not that exciting. What is more amusing is the dramatic price decline as Serge(y) was trying to offload his 4 bedroom colonial, which was first put on the market in August 2008 (oddly, the Chicago firm, which everyone has identified by now, still has not indicated just when it was that it first approach Serge… and under what guise did it agree to raise his base pay to $1.2 million). Either way, Serge(y) tried to sell first for $689,000, and after less than a year is now “PRICE TO SELL AND PRICE BELOW NEW ASSESSED VALUE” at $550,000: at least the man has a good sense of the true NJ real estate market: those math Ph.D. and SS7 certifications come in handy on occasion. (Alas that price does not cover the $750,000 bail set earlier for Mr. Aleynikov, maybe they can throw in the Honda as part of the package).

    Any interested buyers who want to “move right in” should contact Julie Corbo at RE/MAX: if Serge(y)’s MO is any indication, the first to dig a hole in the back yard may just uncover all the program trading secrets that have ever existed.

    Other circumstantial evidence: projection ping pong table with Dolby 7.1 surround sound, washed out beige leather sofa and futon, satin sheets, and a corner jacuzzi. After further review, it is no wonder that Serge(y) was willing to sell to the highest bidder.”

    http://zerohedge.blogspot.com/2009/07/casa-di-serge.html

  29. Dissident HEHEHE says:

    Great stuff Grim. Maybe you’ll go before Congress like Markopolos since you’re doing the FBI’s job for them.

  30. Clotpoll says:

    Methinks Grim should keep a very low profile.

    Getting close to shallow graves time for a lot of people. Too many people are beginning to know too much about stuff that certain others would prefer they don’t know.

  31. Sean says:

    The bail amount was execssive no? Grim nice work. Keep up the good work and perhaps Obama will give you an honorary FBI badge like Nixon gave Elvis.

  32. kettle1 says:

    question for the traders…

    what happens when program trading exceeds 50.1%?

    it would seem that the trading programs control the market at that point. If thats the cash that posses some sticky questions about national security/network security

  33. kettle1 says:

    last week program trading hit 48.6%, an all time high

  34. Firestormik says:

    chifi,
    I’m on the market for a cheap cr@p which can get me from home to the station. Since I’ve rebuilt 3 engines by myself in the past, I’m not scared about problems at all.

    Get my email from Grim.

    chicagofinance says:
    July 6, 2009 at 1:08 pm
    I need advice on disposing of a car

  35. chicagofinance says:

    We found some footage of Serge at work at Goldman…..
    http://www.youtube.com/watch?v=Y9w3_3T3U5g

  36. chicagofinance says:

    ik: get it from grimmy…

  37. chicagofinance says:

    35.kettle1 says:
    July 6, 2009 at 10:01 pm
    last week program trading hit 48.6%, an all time high

    ETF use?

  38. chicagofinance says:

    38.chicagofinance says:
    July 6, 2009 at 10:07 pm
    ik: get it from grimmy…

    scratch that….

    it’s chicagofinance
    at yahoo.com

  39. kettle1 says:

    chifi

    that 48% encompasses GS who wasnt even on the list for program trades last week, which is unusual in and of itself.

    not suggesting anything, just stating unusual behavior

  40. Ben says:

    “Methinks Grim should keep a very low profile.

    Getting close to shallow graves time for a lot of people. Too many people are beginning to know too much about stuff that certain others would prefer they don’t know.”

    Clot, I doubt it. These guys specialize in white collar crime, but in reality, probably don’t even think they are doing anything wrong. That’s probably why they do it out in the open. I don’t think they would have the balls to pull through with any murder. The SEC turns a blind eye to insider trading. We haven’t reached the point where we turn a blind eye to murder yet.

  41. Firestormik says:

    PGC: Just asked Grim to give me your email if you don’t mind

  42. sas says:

    Serge Aleynikov is no Copperhead agent.

    This is a contrived story.
    Diversion.

    SAS

  43. sas says:

    btw- you know how many REAL nuggets I’ve given you blokes over the years, to follow up on.

    someone should be buying me the first round by now.

    SAS

  44. still_looking says:

    SAS

    Ya gotta show up to have us buy you one…:)

    sl

  45. sas says:

    in any case, back to RE.

    I saw a house I like in Bergen. I’m thinking about maken a move to buy for a relative of Juanita.

    Its brick & frame. what you all think of brick & frame?

    SAS

  46. chicagofinance says:
  47. chicagofinance says:

    42.Ben says:
    July 6, 2009 at 10:23 pm
    Clot, I doubt it. These guys specialize in white collar crime, but in reality, probably don’t even think they are doing anything wrong. That’s probably why they do it out in the open.

    ben: I’ve said it more than once….the Russian business guys a the biggest bastards of all time. Moral compass? The scumbags make investment bankers look like Peace Corp volunteers.

  48. chicagofinance says:

    SAS….I need some warm cognac and hemp milk…..

  49. Firestormik says:

    chifi:
    You’ve got an email

  50. sas says:

    “I need some warm cognac and hemp milk”

    ya gotta wait till the fall.

    :)
    SAS

  51. PGC says:

    I think we need to get the Office Space “Jump to conclusions” mat out to put this program trading into perspective.

    There are a few things to take into consideration here. The first is the overall trading volume on the exchanges is down. The level of automated trading will show show up as a big number because program trading by its nature will throw up a lot of trades. All those S&P500 funds will be trading almost every stock stock under it. So instead of generating one trade, you are generating 500 trades. Now multiply that across the banks client base. All those pension funds and university endowments, chasing yield and growth.

    To give a real world example, we have BASF. They announce layoffs and the price drops. While the bank will moving its position in its german subsidiary, it will be booking some client trades through ADR’s and the bigger clients will have to book trades against the american book to meet 15a6 reporting requirements. In reality, the bank has to make one trade, to cover the position, but on the back end it will generate several thousand trades, to balance the books.

    As for the banks putting routers in exchanges, there are a few bucks to be made off arbitrage moves in the market, but banks are looking more for instant execution. They don’t want a price to move as the order is executed.

    At the end of the day, the only real story here is the trade secrets case. IF GS has been using Linux and Open Source Linux and associated products then this guy has a defense. This could be the IB version of Metallica vs Napster, except this time Naptster wins.

  52. james says:

    Just got word that there are plans for a nationwide taxpayer protest in DC on 9/12.

  53. Sean says:

    For the propeller heads if you want to know more about program trading look up Model Trade Execution (MTRX).

    If you want to know how fast trading is these days it about 5 milliseconds, and check out the Direct Market Access(DMA)platforms.

    And for the tinfoil hat wearing crowd, just because some trading programs are faster than you does not mean the banks are front running anybody. Technology provides equal opportunity to anyone even in some cases the common retail investor, it is not like the days of old when the Big Board $2 brokers would manipulate the paper system. There are literally thousands of algorithms at thousands of firms competing against each other on both the buy and sell side.

    Also most of the Big banks themselves are now giant hedge funds. It wasn’t always that way. The program trading does push the markets around no question about it.

    If you want to learn more start here.

    http://www.automatedtrader.net

  54. Firestormik says:

    Stu,
    As I said before, you would have been in the first line protesting the vaccination had your kid have the problem.
    Nobody knows why, but NJ is the champion in terms of kids with problems. Vaccinations? I don’t advocate it, but why not? Everything is mercury based :(
    Stu says:
    July 6, 2009 at 9:38 pm
    Keep on delaying those vaccinations

  55. Charles says:

    For any who might be interested:

    a website called ZeroHedge has been tracking GS’s program trading at the NYSE for several months. They have noted several very strange patterns involving GS’s trading. From the work done there, the SEC has begun preliminary investigations into GS’s trading influencing the movement of the NYSE. Trading on the market has been down since last October. GS’s portion of Program Trading has been increasing since December to where (until last week when NYSE change reporting rules) GS accounted for over 60% of all the Program Trading done at the NYSE. The closest competitor is Merril Lynch at 1/3 of GS…..The extent of Serge’s involvement is unknown. It is worthy to note that as soon as he left, GS went to the FBI to say that code had been taken and this code can be (not COULD BE, but CAN BE) used to manipulate the market…..

  56. ddgrant says:

    Looks like there’s another contender for Sergey’s Home:

    http://blogs.reuters.com/reuters-dealzone/2009/07/13/all-quiet-at-the-aleynikov-mcmansion/comment-page-0/#comment-344015

    Facebook: Sergey Aleynikov Fan Club : http://flq.us/wg

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