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Ex-Goldman banker pleads guilty to insider trading
Eugene Plotkin, under plea deal, could receive up to 165 years in prison
By David Weidner, MarketWatch
Last Update: 4:29 PM ET Aug 28, 2007NEW YORK (MarketWatch) -- Former Goldman Sachs Group Inc. associate Eugene Plotkin on Tuesday pled guilty to charges of insider trading.
Plotkin, 28, along with an associate, David Pajcin, led an insider trading ring that netted $6.7 million, according to prosecutors. Plotkin, a former associate in Goldman's (GSGoldman Sachs Group, Inc
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GS) fixed-income research division, pled guilty to eight counts of conspiracy and securities fraud charges before Judge Debra Freeman of U.S. District Court for the Southern District of New York. He faces a maximum of 165 years in prison.
The defendants used a mole planted at a printing facility to get advance copies of BusinessWeek magazine and obtained secret information on major mergers supplied by Merrill Lynch & Co. (MERMerrill Lynch & Co., Inc
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MER) analyst Stanislav Shpigelman, officials said.
They also used the names of relatives and an exotic dancer to front accounts that they controlled, officials said.
The U.S. Securities and Exchange Commission lodged civil charges against 13 people involved in the scam.
Federal authorities said they launched a probe in late 2005 after noticing unusual trading activity ahead of the purchase of Reebok by Adidas.
Investigators grew suspicious when a 63-year-old retired seamstress in Croatia made several million dollars by placing call options ahead of the Adidas deal, prosecutors said. The woman turned out to be the aunt of one of the ringleaders in the scheme, Pajcin.
In total, the pair traded in at least 25 stocks within a year. The SEC froze more than $6 million in trading proceeds.
Separately, prosecutors say Plotkin and Pajcin also traded on information leaked by a jury member in a case involving Bristol-Myers Squibb Co. and on pre-published material in BusinessWeek obtained by a worker at the printing plant.
The SEC lodged civil charges against Plotkin and Pajcin as orchestrators of fraud, as well as three sources of insider information including Shpigelman, Renteria and a former Quad Graphics employee Nickolaus Shuster.
The SEC also named nine more tippees and nominees in the case including Sonja Anticevic, 63, of Omis, Croatia, who is Pajcin's aunt.
Monika Vujovic, 23, described by authorities as an exotic dancer, allowed Pajcin to trade through her account in exchange for half of the proceeds of the insider trades.
David Weidner covers Wall Street for MarketWatch.
