A former software engineer with CME Group Inc. avoided a prison sentence for stealing the source code for the company’s electronic trading platform and trying to use it to set up a company to provide software for China’s Zhangjiagang chemical electronic trading exchange.
The engineer initiated contract negotiations with the Zhangjiagang Free Trade Board, which runs the exchange, before his arrest.
Dr. Chunlai Yang, 51, pled guilty to two counts of trade secret theft in an Illinois federal court in 2012. He was originally charged with 10 counts of trade secret theft and faced 10 years in prison and a $250,000 fine each count.
On the reduced charges, Yang faced 57 months in prison under the federal sentencing guidelines.
Prosecutors initially said that the potential financial loss to CME would have been between 50 and $100 million, and later estimated the value of the stolen source code at $23 million.
However, a federal judge found that prosecutors had overstated the potential damage to CME, and estimated it to be only $2.1 million.
A Life Well-Spent
Yang worked for CME from 2000 until he was arrested in July 2011.
The judge noted that Yang had a “life well-spent” — not counting the actions that led to his arrest.
The judge received 95 letters in support of Yang, and many were in court for his sentencing.
Yang admitted that he had downloaded more than 10,000 files containing the source code for CME’s Globex electronic trading platform. He then transferred many of those files to his personal flash drives and his home computers.
According to Gary S. Shapiro, the acting US attorney in Chicago who prosecuted the case,
Trade secret theft is a serious economic crime that affects the interests of corporations, as well as our national interest, in protecting intellectual property. We encourage the private sector to work with federal agencies in the investigation and prosecution of trade secret theft.