Criminal charges against Programmer for actions of the user | Hacker News Reader

Criminal charges against Programmer for actions of the user

5 pointsjtd647 comments

The US Government is attempting to make programmers criminally liable for the intentions of the users of the software. Programmers may end up bankrupting themselves in defense of felony jail time for the hidden intentions of their employers and clients if the prosecution wins this precedent-setting case.

Jitesh Thakkar legally immigrated to the United States from India in 1989 at the age of 13 to live the American Dream. He learned English, graduated from the University of Illinois at Chicago with a Computer Engineering degree, and founded his own small programming business. Now he faces unprecedented criminal charges because his company created software that a client later used to engage in unlawful CME futures trading without his knowledge.

Make no mistake about it—Jitesh is innocent of the charges. He did not know what the trader would do with the software he created, which had legitimate uses. But Jitesh now faces hundreds of thousands of dollars in legal bills because he must go to trial to prove his innocence, even though he has no prior criminal record or even any regulatory infractions.

Jitesh is a fighter and has utilized every monetary resource available to retain a prominent law firm to represent him. The case is scheduled to go to trial on April 1, 2019, in U.S. District Court in Chicago. The financial technology industry and small business owners everywhere will be watching intently because this case could set a precedent that would be used against other innocent programmers.

For those interested in helping out - I have created a Go Fund Me to help him pay for his defense.

https://www.gofundme.com/programmer-vs-us-govt-legal-defense-fund?sharetype=teams&member=1647830&rcid=r01-154975040165-67224aa5f0804395&pc=ot_co_campmgmt_w

The government's side of the story can be found here:

https://www.cftc.gov/PressRoom/PressReleases/pr7689-18

A link to the indictment can be found here:

https://www.justice.gov/criminal-vns/case/jitesh-thakkar

Is Thakkar's position that his company did not understand that this "back of book" feature was against the law, or is it a legal feature (perhaps supported by other platforms) that "Trader A" happened to use in an illegal manner?

Does it seem odd that the identity of "Trader A" is shielded given they are the party that directly violated the law? Is "Trader A" taking a plea deal to testify against Thakkar?

I'm sure the truth lies someplace in between, but the government allegations (if taken at face value) seem (to me) to be both plausible and damning. Personally, I hope "Trader A" pays a price and not just these devs.

Unfortunately, at the moment, the government's side sure does read like "Trader A" said: "Hey I would like to break the law, can you help me?" and the devs said "Sure, we can do that."

The trader's identity is revealed on page 2 of the actual indictment: "Navinder Sarao was a futures trader who lived in the United Kingdom."

Apparently, he played a role in the 2010 "Flash Crash":

https://en.wikipedia.org/wiki/2010_Flash_Crash#Evidence_of_m...

Looks like he pled guilty in a Chicago court in 2016 and is currently in prison:

http://fortune.com/2016/11/13/sarao-flash-crash-trader-fraud

> Navinder Singh Sarao, a London-based stock trader, has pled guilty to one count of wire fraud and one count of “spoofing” in a Chicago court. He is expected to serve 78 to 97 months in jail and surrender nearly $13 million, according to the Telegraph.

> Sarao’s crime involved manipulating derivatives prices by placing and quickly cancelling a massive number of orders on the Chicago Mercantile Exchange. Between 2009 and 2014, Sarao reportedly earned $40 million through manipulation.

Sounds like the guy is an ass. I would not be surprised if he mislead the developer and when “cooperating” with cftc made it sound like he knew that software broke the law.

"Back of the Book" can be achieved by increasing your order quantity. It isn't illegal. To this day the CME's api states that if you increase your quantity you "lose priority" a.k.a. you move to the back of the book. Not illegal, and is actually very fair. If one tried to add 20 friends to your spot in line while waiting for concert tickets you would be asked to move to the back of the queue. Reference [CME Specs for cancel replace quantity increase.](https://www.cmegroup.com/confluence/display/EPICSANDBOX/Orde...)

Trader A is identified. He (Sarao) made millions off his trading and spoofing. Jitesh and Edge Financial were only paid $24,000 for their programming work.

According to the motion to dismiss (which the judge ruled was arguments for trial):

> The indictment against Jitesh contains no allegations

> that Sarao ever told Jitesh that he planned to spoof,

> move the market, or engage in any other illegal activity,

> which is consistent with Sarao’s FBI interview reports

> in which he told the government that he did not tell

> Jitesh what he planned to do. This is also consistent

> with Sarao’s indictment, which recounts Sarao’s

> conversations about his intent to spoof with the other

> three programmers over five pages of the indictment,

> but only contains one reference to Jitesh: “In

> approximately late 2011, SARAO began working with

> [Jitesh], to further develop the automated trading

> programs and functions he had been working to design

> and implement since early 2009.”

Does he or his company had other clients? Could he be charged if he was working in Trader A's company?

> perhaps supported by other platforms

I which other platforms is this legal, it looks very shady.

> Does it seem odd that the identity of "Trader A" is shielded

My guess is that "Trader A" snitched the dev in exchange of a reduction of the sentence.

1. Edge Financial Technologies had many clients. This was one small client at the time.

3. Sarao, the trader, is a witness against Jitesh and is part of his plea deal.

2. Which other platforms is this legal?

Answer: Adding quantity to an order is legal on most stock markets, and derivatives markets around the world.

Adding to your order is a perfectly legitimate transaction. Think of it as "Just before the price rises, I want to buy all I can." or the opposite "Just before the price falls, I want to sell all I can."

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