State judge Justice Daniel Conviser overturned a jury verdict from May that found Aleynikov guilty of breaking a law called the "unlawful use of secret scientific material".

In a 72-page opinion, Conviser wrote that the programmer "acted wrongly" when he copied Goldman's HFT code when he left the firm in 2009 but that prosecutors "did not prove he committed this particular obscure crime".

This is the second time that Aleynikov has had a conviction overturned. He was first found guilty by a Manhattan jury in December 2010 of federal criminal charges relating to the theft of trade secrets and interstate transportation of stolen property. However, after serving little more than a year of his 97 month sentence, a US Appeals Court overturned the conviction.

Yet a State judge quickly ruled that double jeopardy does not apply and that New York prosecutors could make their own case against the Russian-born programmer because the charges were different. Again he was found guilty by a jury and again he has had that conviction quashed.

The case may still not be over, with Manhattan district attorney Cyrus Vance considering an appeal against the decision.

Aleynikov worked for Goldman from May 2007 to June 2009, where he developed computer programs supporting the firm's high-frequency trading on various commodities and equities markets. He then quit to help develop a HFT platform for Teza Technologies, a Chicago-based start-up formed by ex-Citadel executive Mikhail Malyshev.

In a case made famous by the Michael Lewis book Flash Boys, prosecutors alleged that on his last day working for the bank, Aleynikov transferred "substantial portions" of Goldman Sachs's proprietary computer code for its trading platform to an outside computer server in Germany.

He was accused of encrypting the files and transferring them over the Internet and then deleting "the program he used to encrypt the files and deleted his computer's "bash history," which records the most recent commands executed on his computer".

In addition, he had already allegedly transferred "thousands of computer code files" related to the firm's proprietary trading program to his home computers during his two years working there. He did this by e-mailing the code files from his Goldman Sachs account to his personal one and storing versions of the code files on his home computers, laptop, a flash drive and other storage devices, said prosecutors.

On 2 July 2009 Aleynikov flew to Chicago to meet Teza, taking a laptop and storage device allegedly holding the valuable Goldman proprietary code. He was arrested the following day at Newark airport, before facing his two trials.

Aleynikov is now suing Goldman in federal court to pay for his defence. Following yesterday's decision, the programmer's lawyer, Kevin Marino, told the New York Times: "Goldman Sachs is powerful enough to provoke two failed criminal prosecutions to settle a private score. Goldman Sachs has also spent millions in shareholder dollars to evade their obligation to pay Mr Aleynikov’s legal fees for winning two criminal cases."