Insider trading probed at Goldman, Merrill
Scam involved Goldman analyst, Merrill banker, advanced copies of Business Week and tips on coming deals.
April 11, 2006: 5:01 PM EDT
NEW YORK (Reuters) - An analyst at Goldman Sachs, a banker at Merrill Lynch and a printing plant worker were arrested on Tuesday, charged with participating in an international insider trading ring that netted $6.7 million and involved more than a dozen people.
Authorities said the schemes involved stealing pre-publication copies of BusinessWeek magazine to gain advance knowledge of share tips and persuading an investment banker to pass on details about upcoming mergers.
The U.S. Attorney said those under arrest were Eugene Plotkin, a bond analyst at Goldman Sachs Group Inc. (down $3.31 to $159.15, Research) and Stanislav Shpigelman, a junior-level investment banker at Merrill Lynch & Co. Inc (down $1.80 to $77.12, Research).
A third man, Juan Renteria, an employee at a plant that printed BusinessWeek magazine, was arrested in Milwaukee. All three face insider trading and securities fraud charges.
"These defendants developed their sources of information in the hopes of running that insider trading business as a money-making machine, and for a little while it worked, netting millions of dollars," said Michael Garcia, the U.S. Attorney for the Southern District of New York.
The case showed "there are still some people out there even at the biggest and best of Wall Street firms who are motivated by greed, are willing to put their careers and their liberties in jeopardy," Garcia added.
The case is linked to the arrest last year of David Pajcin, a former Goldman employee who allegedly made stock trades from stolen pre-publication copies of BusinessWeek. Pajcin is cooperating with authorities, officials said.
The U.S. Securities and Exchanges Commission said the schemes were orchestrated by Plotkin and Pajcin, who persuaded Shpigelman to provide tips on upcoming mergers in return for a share of trading profits.
In a second scheme, Plotkin and Pajcin recruited two individuals, including Renteria, to obtain jobs at a printing plant, steal advance copies of BusinessWeek and tip them about the names of companies discussed.
The arrests were the result of an eight-month investigation that began in early August 2005.
Plotkin, aged 26, faces a maximum penalty of 70 years in prison; Shpigelman, aged 23, could get up to 55 years; and Renteria, aged 20, could be jailed for 15 years.
All three will be arraigned later on Tuesday.
Separately, the SEC filed civil insider trading charges against Shpigelman, Plotkin, Renteria and a number of people who allegedly received inside tips. These included Pajcin's aunt Sonya Anticevic, a former underwear factory worker living in Croatia. |
