Reuters’ Matthew Goldstein broke a fascinating story on Sunday, reporting that a Goldman Sachs computer programmer stole at least part of the code the investment bank uses for its so-called program trading.

Sergey Aleynikov, a Russian immigrant who’s a naturalized U.S. citizen, who coded for Goldman, left to go to a Chicago firm for three times his $400,000 salary. Before he left, he swiped 32 megabytes of top-secret computer code (accidentally, he says) related to Goldman’s proprietary automated trading software.

What’s that and why’s it so important?

The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.

Oh, yeah, that.

In his original piece, Goldstein pointed to the work of blogger “Tyler Durden” of Zero Hedge, who had been writing about Goldman (which, awkwardly, and as a matter of disclosure, is one of The Audit’s funders) suddenly falling off the New York Stock Exchange’s automated-trading charts the week before. That’s strange because Goldman is always No. 1. The NYSE has since said it was a screw-up, but it’s an awfully coincidentally timed screw-up.

Zero Hedge has been all over this story since with sometimes-hyperbolic posts like the one linked above asking whether the incident will “destroy Goldman Sachs.” Something tells me no, no it will not. But there’s a lot of interesting analysis and background in that post (applaud Goldstein for linking to it, as well).

According to a Factiva search, Reuters had the story all by its lonesome (in the mainstream press, anyway) for some seventeen hours. The New York Times, Wall Street Journal, and Financial Times all had no news of the scandal in their Monday editions.

Bloomberg picked up the ball and advanced it a bit on Monday.

I think Bloomberg’s piece handles the news angle better than any of the other big-press pieces today, too. It leads with the prosecutor saying that “may lose its investment in a proprietary trading code and millions of dollars from increased competition if software allegedly stolen by a former employee gets into the wrong hands.”

That’s a key question for Goldman shareholders, obviously. Bloomberg points out that Aleynikov uploaded the code to a German website and it’s unclear who, if anyone, got their hands on it. It’s unclear if or how much Goldman’s trading could be affected by the theft.

The Times, on B1 today, quotes a market participant saying it wouldn’t be easy to use the stolen code in the U.S., but that “in countries that are more lawless it could have value.”

Germany is the least likely lawless place, but it will be interesting to find out why Aleynikov used a German server for his upload. Goldman told the Times and the Journal, which stuffs the story on C3, that the theft wouldn’t affect it, but both papers use the past tense, which leaves the question open as to whether it could yet affect it.

But the most interesting part of Bloomberg’s story is this quote from Assistant U.S. Attorney Joseph Facciponti (which the NYT borrows):

The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.

Which raises the obvious question of whether Goldman Sachs itself uses the program to manipulate markets in unfair ways. What controls are there on this? Who regulates it? I’ll look forward to some explanatory pieces on this in the days ahead.

Newsweek wrote about the case today, but unfortunately fell into some incorrect bloggy speculation about which Chicago firm had hired Aleynikov, saying “speculation is that the Chicago-based employer is a small company called Getco, which uses “highly-automated algorithms” to enhance “liquidity and efficiency to electronic financial markets.”

It’s easy to get things wrong on a developing story like this, especially if you crib speculation off the Internet.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.