The last time TSW readers heard from Sergey “Flash Boy” Aleynikov, the underdog high-frequency trading guru had fought the law to a rare win: the New York State Supreme Court had tossed a raft of evidence in his second criminal case, finding that the feds’ original arrest was tainted by a lack of probable cause.
Aleynikov was recently back in court yet again, this time on former employer Goldman Sachs’ Third Circuit appeal of the District of New Jersey’s judgment that Goldman must pay Aleynikov’s current and future defense fees, along with the related “fees on fees” (a million in lawyer fees billed in the advancement suit). The court reasoned that since Aleynikov was a “vice president,” and Goldman’s bylaws defined “officer” broadly, he was entitled to the fees. Right?
Err…wrong. On September 3, Flash Boy’s luck ran out as the Third Circuit bounced the trial court’s summary judgment advancement order. Finding the term “officer” ambiguous as it appears in certain Goldman bylaws providing for reimbursement of legal fees for “officers” involved in work disputes, the Court concluded that genuine issues of material fact as to the fee issue required further proceedings and sent the matter back down. The trial court, rather than focusing on the actual characteristics of the “vice president” position, had paid too much attention to the label, the Third Circuit wrote.
Don’t draw the curtain on the Aleynikov drama yet. More proceedings are to come in the District of New Jersey, and the former programmer still faces criminal charges in New York state court (double jeopardy can’t block the prosecution, since the State of New York is a separate sovereign). TSW will continue to bring you the latest in this drawn-out saga.
