Another code theft case has hit Wall Street, highlighting the need for better controls. Samarth Agrawal, a trader at Societe General's high-frequency trading group in New York, was arrested and accused of stealing proprietary code. Agrawal stands accused of copying proprietary code into Microsoft Word documents last summer.

He is alleged to have printed hundreds of pages of this data and was later captured by surveillance cameras putting "what appeared to be printouts" into a backpack. In November, Agrawal deleted a folder on his personal network drive that contained the code, says the FBI. It was his last day in the office. He took the next four days off before submitting his resignation, saying he wanted to return to India to start his own firm.

He also told an undercover FBI agent, however, that he had been interviewed by top firms on Wall Street. Firms must embrace a set of controls to prevent this. Frankly, there is only so much one can do. Societe General had limited access to the code, making only pieces of code available to certain programmers. It also monitors the system for transfers, but at some point, coders will have to work on code and that means access to large portions.

Agrawal faces one charge of theft of trade secrets and 10 years in prison. To add insult, he was denied bail, as he was judged a flight risk. If you are working on proprietary code, you can bet that you'll face a lot of scrutiny once you leave. Especially if you leave abruptly. It's really not worth it. Consider what happened to Sergey Aleynikov. Some thought the evidence he stole code from Goldman Sachs (NYSE: GS) was sketchy. But he was indicted on three counts--theft of trade secrets, cross-border transport of stolen property, and unauthorized computer access. He faces up to 25 years in prison.

For more:
- here's a CNBC article

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