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Bailey McCann, Opalesque New York: Two new laws recently passed in the US may make life tougher for US employees of financial services firms that misuse company trading models, according to a client alert from law firm, Dechert LLP obtained by Opalesque. For individuals that break these new laws the penalties include fines and potentially years in prison. The Trade Secret Clarification Act of 2012, signed into law on December 28, 2012, closes a loophole in the Economic Espionage Act that last year caused a federal appeals court to reverse the widely reported conviction of Sergey Aleynikov, a Goldman Sachs computer programmer.

According to the attorneys, in that case, Aleynikov downloaded the source code for Goldman Sach's internal high frequency trading model for use by his new employer, a competitor to the firm. Originally he was convicted for theft but the ruling was overturned after it was decided that code used internally wasn't covered under theft rules. The new law changes this loophole to ensure that internal code is also protected.

In addition, on January 14, 2013, President Obama signed into law another statute, the Foreign and Economic Espionage Penalty Enhancement Act. The change here significantly increases the fin......................

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