A former computer programmer for CME Group Inc. (CME) intends to plead not guilty to charges that he stole data from the futures exchange company, the man's lawyer said Friday.

Chunlai Yang, a senior software engineer who worked at CME for 11 years, stands accused by the U.S. government of downloading proprietary source code underlying CME's markets, part of an alleged plan to build a new derivatives exchange in China.

Yang, a Chinese national with U.S. citizenship, was arraigned on the charges last week following an investigation by the Federal Bureau of Investigation. CME began closely monitoring his computer activity in early May, according to the complaint filed against him.

CME is the world's largest operator of futures exchanges, in terms of trading activity. Banks, asset managers and energy companies trade CME's futures contracts to guard against shifting commodity prices and interest rates, or to speculate on market movements.

According to the complaint, Yang worked on technology powering CME's front-end trading systems until the company fired him in conjunction with the allegations. CME worked with legal authorities in the investigation.

"The company has found no evidence that customer information, trading data or required regulatory information was compromised," a CME spokesman said Friday.

Yang, 49, appeared in a Chicago court on Friday, wearing a baggy orange jump suit and ankle shackles. Yang's attorney, Christopher Graul, said his client intended to plead not guilty to the charges.

Magistrate Judge Michael Mason ordered Yang released on $500,000 bond later Friday, putting him on home detention with an electronic monitoring device. An indictment on the charges is expected sometime in the next month, after which point the case could go before a grand jury.

The complaint alleges that Yang was in talks with several individuals who planned to use CME's source code to establish East China Technology Innovation Park Co., aiming to build a futures exchange and software company where Yang was to be the "lead technical person."

CME declined to comment on whether the company would pursue its own legal action against Yang.

The case highlights the critical importance of computer code to trading operations and is the latest in a series of hard-fought legal cases over alleged theft.

Sergey Aleynikov, a former computer programmer for Goldman Sachs Group (GS), was found guilty in December of stealing algorithmic trading code from the bank ahead of his departure to join a new high-frequency trading firm. He received an eight-year prison sentence in March.

In February, Samarth Agrawal received a three-year prison term for taking code from French banking group Societe Generale SA (SCGLY, GLE.FR), where he worked as a trader.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

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