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So You Want To Work At Goldman Sachs? From Sergey Aleynikov To Fabulous Fab

This article is more than 10 years old.

Fabrice Tourre (Image credit: AFP/Getty Images via @daylife)

For a very long time, Goldman Sachs has attracted some of the best young minds on Wall Street as the world’s most prominent and successful investment bank. It has been the place to go to get rich and launch spectacular careers in finance. But the stories of two former mid-level employees in the news this week show that Goldman Sachs can sometimes be a bad career move.

At 34, Fabrice Tourre, a former vice president on Goldman Sachs’ structured products team, was found liable on Thursday in a fraud case brought against him by the Securities & Exchange Commission. Goldman Sachs settled the case in 2010 and Tourre wound up being the rare structured products man on Wall Street to be found liable in an SEC case because of work done on toxic mortgage deals that contributed to the financial crisis.

As a former Goldman employee, Tourre became a fat target for an SEC looking to hold someone accountable for the financial calamity that hit America and federal regulators marshaled all their resources to get Tourre, who was 28 when he worked on the deal that got him in trouble. Tourre recognizes that he has become the face of the financial crisis. “I’m not naïve,” he told The Wall Street Journal. “It’s going to stay with me forever.” He said he would always be known as the Fabulous Fab, the nickname he earned from a colleague at Goldman Sachs that was highlighted by federal lawyers.  "You cannot erase Google searches. You will forever get the same articles, forever get the fabulous Fab,” Tourre told The Wall Street Jounal.

But at least Tourre is not facing any jail time. In fact, no one who helped construct the toxic mortgage deals on Wall Street that led to the financial crisis has spent time in jail. Around the same time that Tourre was being held liable by a federal jury in downtown Manhattan, people on Wall Street got their first look at Michael Lewis’ latest big article in Vanity Fair. In the article, Lewis makes a convincing case that Sergey Aleynikov’s worst mistake in life was going to work for Goldman Sachs.

Aleynikov is the former Goldman Sachs programmer who was federally prosecuted, convicted and sentenced to eight years in prison for stealing computer code used in algorithmic trading from Goldman Sachs before a federal appeals court overturned the conviction. Then he was arrested again to face criminal charges for stealing the same computer code from Manhattan District Attorney Cyrus Vance. In the article, Lewis asks “did Goldman Sachs overstep in criminally charging its ex-programmer?”

The way Lewis sees it, Aleynikov spent time in prison, got divorced and lost all his money, because of Goldman Sachs’ misguided and overzealous effort to get federal and local prosecutors to go after a man who took something that had little relevance outside of Goldman Sachs. For Lewis, the whole business was partly a product of the cut throat environment inside Goldman Sachs. “The process that ended with Serge Aleynikov sitting inside a federal prison may have started with some Goldman Sachs employees concerned about their bonuses,” Lewis writes.

Even a sympathetic view of the Tourre and Aleynikov cases doesn’t mean these two former Goldman Sachs employees didn’t do something wrong. As one of the jurors told The Wall Street Journal about Tourre, “at the end of the day, he probably could have done the right thing … but he chose to play the game.” In a statement about Lewis’ article on the Aleynikov case, Goldman Sachs said it had “spent millions of dollars and tens of thousands of hours developing the proprietary source code and technology used in our market making business,” adding that the federal appeals court found that Alyenikov encrypted and uploaded to a server in Germany more than 500,000 lines of source code for Goldman’s HFT system that largely included proprietary code that Alyenikov took to his new employer that paid him more than 2.5 time his Goldman salary. Alyenikov shouldn’t have taken the code.

It is interesting that both the Tourre and Alyenikov stories are about men who grew up in modest circumstances in foreign countries and ended up on Wall Street, with their coming to America stories going wrong at Goldman Sachs.  Tourre was raised in the Paris suburbs and arrived in Ohio, where he interned as a production worker on a car-parts assembly line. Alyenikov left Russia after the government wouldn’t let him study computer science and arrived at Manhattan’s 92nd Street Y with no money.

These are just two stories about two former Goldman employees. Goldman Sachs employs 31,700 people who on average make $400,000 a year. Goldman Sachs won’t have any trouble continuing to attract talented and ambitious people from the U.S. and around the world. But those folks might want to watch their backs.