As Quant Prosecuted for Stealing Headlands Code Press Opposed Closure Still on Max Dama

As Quant Prosecuted for Stealing Headlands Code Press Opposed Closure Still on Max Dama by Matthew Russell Lee, Patreon Book Substack SDNY COURTHOUSE, Nov 10 –  Back in January 2025 SDNY prosecutors announced an Indictment charging CHEUK FUNG RICHARD HO with theft and attempted theft of trade secrets.  The charges in the Indictment arose from HO’s alleged scheme to steal trade secrets from his former employer, a global quantitative trading firm. That firm was Headlands Technologies LLC. On September 12, 2025 Ho was before U.S. District Court for the Southern District of New York Judge Jannette A. Vargas. Inner City Press was there, and live tweeted: Judge: Where are we on discovery?  AUSA: We've seized the AWS files of Mr. Ho's firm, 15 TB.  Judge: Can you do AI search?  AUSA: We don't currently have that capability. But we think a June 2026 trial is doable Ho's Skadden lawyer: My client says he wrote the source code. All we have from the Government is 61 snippets  Judge: A 3 week trial is set is set to start July 13, 2026. On November 7, 2025 the US Attorney's Office filed to quash subpoenas Ho filed, saying they do not meet the Nixon standard. Jump cut to August 2026, when the US Attorney's Office proposed to seal the courtroom not only for portions of the trial, but also for the Daubert expert hearings. Inner City Press immediately filed opposition, now on CourtListener here. Note that previous attempts in SDNY to seal the courtroom have been opposed, and transparency safeguards imposed were only belated and partially complied with, see here. And here. This is an ongoing project, including in other Districts. On August 18 Ho's lawyers also opposed sealing, and first noted: "A member of the Press has likewise formally opposed the Government's motion to close the courtroom under the First Amendment, see Docket No. 152" - Inner City Press' opposition to unsealing.  Full 16 page memo by Ho's lawyers on Patreon here. On August 21 a non-party was directed to file a declaration supporting sealing - under seal: "ORDER as to Cheuk Fung Richard Ho: Pursuant to 18 U.S.C. § 1835(b), Nonparty-1 is authorized to file under seal a declaration in support of the Government's motion to close the courtroom for portions of the upcoming Daubert hearings and trial.  (Signed by Judge Jeannette A. Vargas on 8/21/2026) ." On August 25 Judge Vargas denied Ho's motion for a bill of particulars, saying in part that the indictment is detailed enough. On August 31 Judge Vargas denied a request to change the timing and sequence of the Daubert hearing. But will it, as the US Attorney's Office has requested, be sealed? An answer came on September 1, just after Inner City Press orally opposed sealing of Judge Vargas' courtroom in another case, Cumulus v. Nielsen) - "received an objection to the contemplated court closure from a member of the press. ECF No. 152 ('Lee Opp’n' or 'Press Opposition'). [T]he Court will authorize limited closure of the courtroom during the Daubert hearings and trial, as set forth further herein. ... The breadth of the closure will be as narrowly tailored as reasonably possible under the circumstances." And so on September 2: All rise! Judge Vargas: My order came out yesterday, on closure. My understanding is that closure will be limited, it covers this hearing [and the trial, which Inner City Press also intends to live tweet]. Please refer obliquely to confidential information  AUSA: We ask for permission at the outset to seal these code files. Ho's lawyer: No objection. Judge: The Government may proceed. AUSA: Ms. Lena Lowenstine, what is your education? Expert: Mathematics, cryptologic, U of Cincinnati.  Expert: I worked at the NSA for over four years, in reverse engineering software... Then at Washington University in St. Louis, I wrote code that automated my own job so I left, to government contractor Booz Allen  Expert: At Booz Allen I reviews satellite imagery. Then I was a contractor for the FBI on cyber investigations.  Now I work directly for the FBI. I am a certified ethical hacker. I have spend 30,000 hours writing computer code.  AUSA: What about this case? DOJ expert: I was shown Headlands files by an AUSA. The files were chosen by Headlands. I compared them to One R Squared's files. AUSA: How did you compare them? DOJ expert: Keywords, the names used, specific elements  AUSA: What was the level of similarity between the Headlands code and the One R Squared code? DOJ expert: It's like two textbooks with the same chapters, same sections and the sentences are saying the same thing, it's one to one. AUSA: Our private screens don't seem to work. Can we ask the people in the gallery to sit in the jury box so they can't see? [Press question: how would this work in the trial, which they also want to partially seal and use privacy screen - but there will be jurors  DOJ expert: Both softwares, representing one third, used 15 threes before stopping. The choices the developer made were exactly the same. 32 times. AUSA: What do you conclude? DOJ expert: That the One R Squared code was derived from Headlands, not independent Cross Ho's lawyer: Do you have any education about trading in the financial markets? DOJ expert Lowenstine: No. Ho's lawyer: But you did crypto logic math. What is that - figuring out somebody's password? Lowenstein: Not really. It's about a key  Ho's lawyer David Meister: At the NSA, your work had nothing to do with HFT? DOJ expert Lowenstein: I don't know what that is.  [Inner City Press: It is high frequency trading. Some questions about witness prep here : )  On September 7 Judge Vargas docketed an order asking for a filing by Labor Dy at 4 pm and saying she'll entertain a motion to push back to the trial - to 2027. Watch this site. On September 9, after another US Attorney's Office letter seeking to preclude defense expert witness Mark Hendricks, Inner City Press was told by informed source the trial is moving to November 2. But as of 11 pm, nothing to the effect was in the docket. It was confirmed the next morning: ORDER as to Cheuk Fung Richard Ho: The Court hereby ADJOURNS trial until November 2, 2026. Trial shall commence at 9:00 AM, in Courtroom 11B, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007 The continuation of the Final Pretrial Conference shall be held on Monday, September 14, 2026, at 10:00 AM, in Courtroom 11B, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007. For the reasons stated on the record during the final pretrial conference held on September 8, 2026, the Court DENIES Defendant's motion, ECF No. 99, to preclude the testimony of Dr. Johnson, and Defendant's motion, ECF No. 97, to preclude Ms. Loewenstine's testimony. As stated at the conference, the Government shall submit a letter brief by September 9, 2026, addressing any objections to the adequacy of the supplemental Rule 16 disclosure of Professor Hendricks served on September 7, 2026. Defendant's response to this letter motion shall be due on Thursday, September 10, 2026." On September 25 the US Attorney's Office wrote in opposing more of Hendricks' proposed expert testimony, this time about how orders placed on exchanges in Dalian, Shanghai and Zhengzhou would not impact trading on exchanges outside of China because of volume restrictions. On October 26, with yet another adjournment of trial past November 2 on the table, the defense said they probably will not ask for an adjournment despite new evidence coming in. Judge Vargas told them each side gets 17 hours. The prosecutors pushed back, wanting more for rebuttal. Only if available. Judge Vargas said the sides should indicate for each forthcoming witness if courtroom closure will be requested. But will that be made available to the press and public, to prepare objections? Watch this site. On October 28 Judge Vargas ruled on the crime-fraud exception (CFE) "ORDER as to Cheuk Fung Richard Ho: The Court is in receipt of the Filter Team's production of the text messages and emails (together, the "Communications") for which the Government seeks an order that the crime-fraud exception to the attorney-client privilege applies. ECF No. 232. The Court has reviewed the Communications in camera and has determined that the crime-fraud exception does not apply to the communications at issue. Therefore, the Court DENIES the Government's motion." On November 9, while nearly all was sealed, Inner Cty Press live tweeted evidentiary arguments, including: (jury not present) Ho's lawyer Meister of Skadden: They have to show the Mr. Ho knew, and this shows he was talking about the code openly, in an interview. Judge Vargas: How are you going to show that these were his statements? Meister: The way it's written  Judge Vargas: Is there going to be foundation introduced for this, a witness on the stand? Meister: This is the normal course of conduct at the company Judge Vargas: I'm going to reserve to see if you establish what this document is, and that the bullets are by Ho.. 4:56 pm back on the record / no longer sealed Ho's lawyer: The Government surprised us by putting on this witness today. We asked them, please give us the list for this week. They said they'll tell us when they know. We find ourselves scrambling Judge: We have an estimate for both, except Mr. Worthington. A filing by midnight- Ho's lawyer: That's early for us. [Ho has his head in his hands]  From November 10: Judge Vargas: So I believe with this witness Max Dama, the US Attorney's Office wants it sealed? Ho's lawyer: It's our cross, and we don't need it sealed. Judge: OK, bring in the witness and jury. Ho's lawyer: Is this your email about China? Dama: I don't know Ho's lawyer: Where you say you'd be afraid, to get arrested or have money frozen? Headlands' Max Dama: I don't know, but I think Citadel had people under house arrest there.  [Notably, AUSA asks to have her re-direct of the SAME witness, Max Dama, be only in a sealed courtoom. November 10 extra from courtroom on X for Subscribers here and on Substack here The case is USA v. Ho, 1:25-cr-3 (Vargas) *** Your support means a lot. 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