Ex-Goldman Analyst Gets Prison in Insider Case
NEW YORK (Reuters) - A former Goldman Sachs Group Inc (GS.N) analyst was sentenced to nearly five years in prison on Thursday for leading an insider-trading ring that netted more than $6 million in illegal profits.
U.S. District Judge Richard Holwell ordered Eugene Plotkin, a former associate in the fixed-income research division at Goldman Sachs, to serve four years and nine months in prison. If convicted at trial, he faced up to 165 years in prison.
Plotkin, 28, was also ordered to pay a $10,000 fine and forfeit $6.7 million after admitting to conspiracy to commit securities fraud and insider trading charges.
"I am ashamed and deeply sorry for what I did," Plotkin told the judge in the U.S. District Court in lower Manhattan.
U.S. prosecutors accused Plotkin and another former Goldman employee, David Pajcin, of trading off of tips leaked by an ex-Merrill Lynch and Co Inc MER.N investment banking analyst, a grand juror and from stolen advance copies of BusinessWeek from printing plant workers.
Authorities said the ring made millions from illegal trading on news of upcoming mergers, including Procter & Gamble Co's (PG.N) acquisition of Gillette Co and Adidas' (ADSG.DE) acquisition of Reebok, as well as a grand jury investigation of drug maker Bristol-Myers Squibb Co (BMY.N).
The case began in August 2005, when regulators grew suspicious of the options trading profits of a 63-year-old retired seamstress in Croatia. Her account was frozen and her nephew, Pajcin, was charged.
FBI agents arrested Plotkin and several other defendants in April 2006.
Plotkin, who holds an economics degree from Harvard University, sought to distance himself from Pajcin and portrayed himself in court papers as an overextended Wall Street profession who fell in with the wrong crowd.
Plotkin's lawyer said in the papers that it was Pajcin who devised the plan "after meeting criminal types in Croatia who had already engaged in a similar scheme." Pajcin, an American of Croatian descent, has also pleaded guilty and awaits sentencing, prosecutors said.
Plotkin, the son of Russian immigrants, maintained in court papers that it was Pajcin, who introduced him to cocaine and other drugs.
But Assistant U.S. Attorney Helen Cantwell told the judge that Plotkin was not somehow "swept into this conspiracy," but was an active participant.
He and Pajcin devised various schemes, prosecutors said.
In one, the pair persuaded Stanislav Shpigelman, an ex-Merrill analyst, to provide tips on upcoming mergers in return for a share of the trading profits, according to prosecutors.
Shpigelman previously pleaded guilty to one count of insider trading and was sentenced to about three years in prison. Continued...
