According to the New York Times, Ex-Citadel employee Yihao “Ben” Pu has been arrested and charged with stealing proprietary secrets relating to the way the fund invests. The charges against the 24-year-old come just six weeks after a civil court in Illinois granted Citadel a restraining order against Pu.
Pu Allegedly Copied Then Deleted Citadel Trading System
Pu was hired as a quantitative engineer last year. On August 26, Citadel confronted Phu about a unusually high volume of data logged under his profile. Pu said that the files contained his personal information. Citadel staff asked him to retain the files. That evening, Pu attempted to delete the files. He and an accomplice loaded computer equipment containing the information into the accomplice’s car. On August 27, Pu went to the accomplice’s house to clean the hard drive of any information. The next day, Pu asked his accomplice to “dump everything”. The accomplice dumped the hardware in a canal. Then, on August 29, the accomplice led an investigative team to the dump site. They recovered six hard drives.
Citadel’s Proprietary Trading Systems
Citadel is a hedge fund founded by Ken Griffin. It relies on sophisticated system to direct and, in some cases, manage its trades. Citadel relies on its trading systems so much that it employs a computer trading division that scans the market, processes the information using special algorithms and executes trades without any human interaction.This is not the first time Citadel’s proprietary trading systems were violated. Previously, a civil court awarded Citadel $2.2 million after an ex-employee breached contract and attempted to delete the evidence.