Rogue Code

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MOST SECRET

MEMORANDUM

DATE: October 15

FROM: Seth Kaufman, Special U.S. Attorney, United States Attorney’s Office, Southern District of New York, Securities and Commodities Fraud Division

TO: Eleanor Kaschnitz, National Security Advisor

RE: Summary of Related Events to NYSE Malware Episode

Last week, you asked me to follow up, informally, on some matters resulting from the events surrounding the discovery of the ongoing malware operation in the Exchange’s trading engines and the Toptical IPO. Here’s what I’ve come up with. If you need more detail, just let me know.

I’ll begin with Toptical. As I’m sure you know, it’s been acquired by Tencent, a major Chinese media company.

As I’m sure you’ve also heard, the SEC and NYSE are, once again, considering serious regulation of high-frequency traders. They haven’t got it right in the past, and I doubt they will this time.

The major credit for stopping this unprecedented criminal penetration of the Exchange software goes to Robert Alshon, Senior SEC Investigator in NYC. He’d been on this case for a week. When he saw the IPO going askew, he strongly urged trading be suspended. He’s scheduled to take over the SEC New York Regional Office. We need more like him.

Yes, you were correct. The operation was being run by an organized crime family in Brazil. Our sister agency that handles such matters has been vague on details, but I’m assured we can confidently expect the operation to be shut down for good.

As for Jeff Aiken and Frank Renkin, they had no involvement in the rogue code. They were set up by those responsible. It is regrettable they were ever suspects, but these things happen. I’m assured they just want it all laid to rest.

The actual perpetrator was Abílio Ramos, aka Marc Campos, a longtime and trusted employee of the Exchange IT security department. After learning of the death of the leader of the criminal cartel for which he worked, he elected to cooperate in exchange for a reduced sentence. He managed the fraud with the assistance of just one other in-house employee, Richard Iyers. Iyers was found murdered in the alley not far from the Exchange. Police don’t know if this is a coincidence or related. There are no suspects.

All in all, what we have is a satisfactory ending to what could have been a very messy outcome. I’ll be in D.C. next week. Let’s get together if you have time.