NEW YORK A former Goldman Sachs Group Inc (GS.N) analyst in custody for 26 months will not have to serve further prison time for leading an insider-trading ring that netted more than $6.7 million, a U.S. judge said on Friday.
David Pajcin, a former analyst in the investment bank's fixed-income, currency and commodities division, faced a sentence of 57 months to 71 months, but U.S. District Judge Victor Marrero said a "downward departure was warranted" because he cooperated with authorities.
"I am sorry for what I did," Pajcin told the judge during the hearing in Manhattan federal court.
Pajcin, who was arrested by FBI agents in November 2005, was expected to be released later on Friday, according to his lawyer, Jesse Siegel.
Prosecutors say Pajcin and another former Goldman employee, Eugene Plotkin, cooked up a variety of schemes to get inside tips.
They traded off leaks about pending mergers provided by an ex-Merrill Lynch and Co Inc MER.N investment banking analyst, information from a grand juror and from stolen advance copies of BusinessWeek magazine, authorities said.
The case began in August 2005 when U.S. authorities grew suspicious of trading in options of sports gear maker Reebok International Inc ahead of its merger with rival Adidas AG ADSG.DE in an account in the name of a retired seamstress in Croatia. The retiree was Pajcin's aunt, according to authorities.
The subsequent investigation led to the uncovering of a far flung insider trading ring, which at one time even contemplated hiring strippers to gain inside information from bankers, but did not do so, according to authorities.
In all, six people were charged criminally and all of them have pleaded guilty. Still pending in Manhattan federal court is a U.S. Securities and Exchange Commission civil case against Pajcin and other defendants.
Pajcin, who is 30 according to information on the Bureau of Prisons Web site, started cooperating early, prosecutors said.
He pleaded guilty in April 2006 to charges that included conspiracy and insider trading, but he remained in custody.
Siegel told the judge Pajcin provided the government with a lot of information it could not get anywhere else.
Marrero also sentenced Pajcin to three years of supervised release and ordered him to forfeit $6.7 million and pay a $10,000 fine.
The ring, led by Plotkin and Pajcin, traded on news about other deals, including Procter & Gamble Co's (PG.N) acquisition of Gillette Co, as well as a grand jury investigation of drug maker Bristol-Myers Squibb Co (BMY.N), according to authorities.
They also bribed two men who worked at a Wisconsin plant where BusinessWeek was printed to get advance information about stocks mentioned in the magazine's "Inside Wall Street" column, prosecutors said.
(Reporting by Paritosh Bansal; Writing by Martha Graybow; Editing by Lisa Von Ahn/Andre Grenon)