Mikhail Malyshev, the Russian CEO of start-up Teza, the Chicago-based hedge fund that was planning to hire Sergey Aleynikov until he was arrested for stealing codes from his former employer Goldman Sachs, is now being sued by his former employer, hedge fund Citadel. Why? "Industrial espionage," they say. What did he do? Well, nothing. Yet.

Defendants' activities, particularly Teza's decision to hire Aleynikov, an accused software thief, create a substantial risk that they have stolen, or may be planning to steal, Citadel's proprietary code, the hedge fund firm said in court papers.

Sounds a little more like industrial McCarthyism to us.

The Cold War in high frequency trading turns hot [Alphaville/FT]
Earlier: Intel's Coverage of Sergey Aleynikov