24-year-old charged with stealing trade secrets

October 14, 2011

With the prime suspect just 24 years old and a couple years out of Cornell, the case has all the makings of a real-life thriller.

With billions in assets, Citadel is one of the world's largest hedge fund managers. In their Chicago headquarters, the firm goes to great lengths to secure its employees and the computer network they use to make investments, especially the secret trading codes known as alphas.

According to federal charges, a once-trusted technology employee who went by the name of Ben Pu set out to steal those valuable alpha codes by bypassing the company's intricate security protocols, then transferring files to external devices. Then when questioned by his superiors, he claimed he was merely downloading academic papers and music files.

But Citadel officials in the Loop didn't buy it and say they determined Pu was stealing trade secrets.

The FBI says after Pu was caught an associate of his told the company and federal agents that the 24-year-old computer whiz had dumped some of the evidence into a sanitary canal near Wilmette Harbor.

Authorities say divers discovered computer equipment in the water that contained Citadel's alphas, considered the building blocks of the firm's success.

The man at the center of the trade secrets case graduated from Cornell in 2009 and was hired at Citadel Investments a year ago may as a quantitative researcher. He was fired August 30th after the company says it discovered the thefts.

On Friday, U.S. Magistrate Maria Valdez set a number of bond requirements, including the surrender of Pu's U.S. and Chinese passports. He is a frequent visitor to China, revealed by photos of him during a recent trip that are still on his personal website.

That personal website is among many Mr. Pu is under court orders to avoid. On the list of other bond requirements is no interaction with a host of people and businesses that might have an interest in the codes that he is accused of acquiring, including, the owner of one particular financial investment company owned by a former Citadel executive. Investigators believe Pu was working with him to steal the codes.

Citadel refused to comment.

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