A former Goldman Sachs bond analyst yesterday pleaded guilty to helping lead a far-flung insider trading scheme involving tips about pending mergers and stolen copies of BusinessWeekmagazine that netted more than $6.7 million in illicit gains.
Eugene Plotkin (28), a former associate in the fixed income research division at Goldman Sachs, pleaded guilty to conspiracy to commit securities fraud and insider trading charges at a hearing in federal magistrate court in New York.
He had been scheduled to go on trial on October 24th.
Prosecutors accused Plotkin and another former Goldman employee of trading off tips leaked by an ex-Merrill Lynch investment banking analyst and also from stolen advance copies of BusinessWeekthat they obtained from printing plant workers.
Under a plea agreement, Plotkin is expected to be sentenced to anywhere from four and three-quarter to nearly six years in prison. He also agreed to forfeit $6.7 million. He is due to be sentenced on November 30th.
"I understood what I did was wrong and against the law," he told US magistrate judge Debra Freeman.
The Harvard-educated Plotkin and several other defendants were arrested in April 2006. Authorities said the ring made millions from illegal trading on news of upcoming mergers, including Procter & Gamble's acquisition of Gillette and Adidas's acquisition of Reebok.
The case began in August 2005, when regulators grew suspicious of the options trading profits of a 63-year-old retired seamstress in Croatia.
The account belonging to the retiree was frozen, and her nephew, David Pajcin, was charged with insider trading.
Pajcin, also a former Goldman Sachs employee, was alleged to be the co-head of the trading ring with Plotkin, and has been co-operating with authorities conducting the investigation.
In one scheme, according to prosecutors, Plotkin and Pajcin persuaded Stanislav Shpigelman, a low-level banking analyst at Merrill, to provide tips on upcoming mergers in return for a share of the trading profits.
Shpigelman pleaded guilty to one count of insider trading last year and was sentenced to three years in prison in January.
In another scheme, according to prosecutors, Plotkin and Pajcin recruited two individuals to get jobs at a BusinessWeekmagazine printing plant to steal advance copies and pass on names of stocks mentioned in the magazine's "Inside Wall Street" column.
Wisconsin printing plant worker Nickolaus Shuster has pleaded guilty in the case.
A former New Jersey postal worker, Jason Smith, was sentenced to 33 months in prison in December for leaking secret grand jury information involving the accounting practices of drug maker Bristol-Myers Squibb to Pajcin and Plotkin.
