CHICAGO (CBS) — A Chicago trader has been sentenced to one year and a day in federal prison for stealing trade secrets from his former employer to start his own competing firm.
David J. Newman, 34, pleaded guilty to one count of theft of trade secrets last year, according to the U.S. Attorney’s office.
Over a five-month period between late 2013 and early 2014, Newman downloaded and stole all of the proprietary computer code and trading software belonging to his then-employer, Chicago-based WH Trading LLC, prosecutors said. He downloaded more than 400,000 files to multiple USB thumb drives.
The intellectual property Newman stole took WH Trading’s mathematicians, statisticians, software developers and traders more than 15 years to develop at a cost of more than $20 million, prosecutors said.
Newman resigned from the company in March 2014 after establishing his own competing firm, NTF LLC, prosecutors said. He had worked for WH Trading since 2004.
U.S. District Judge Manish S. Shah handed down the sentence of one year and a day during a hearing on Thursday. Newman was also fined $100,000, and prohibited from using or disclosing the stolen trade secrets.
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