No Firm Safe From Crooked Staff
Eugene Plotkin, an analyst at Goldman Sachs, has been implicated in a major insider trading scandal by former colleague David Pajcin, who was arrested late last year and is said to be been singing like a canary ever since. The couple are alleged to have used a number of ingenious schemes to gather information and arrange for trades to be made on inside information.
Among other things, the bankers are said to have persuaded 23 year-old Stanislav Shpigelman, a junior analyst in Merrill Lynch's New York M&A department, to pass on information about future deals. Shpigelman was arrested last Tuesday, but soon made bail. Plotkin, however, spent the Easter break behind bars, as he didn't.
Merrill executives Gregory Fleming and Dow Kim sent a note round to colleagues last week, saying that 'this case appears to involve a single individual at our firm, but it underscores how the actions of any one individual has the potential to damage us all'. But the reality is that, even with the best compliance procedures in the world, it's almost impossible to guard against the actions of a bad apple.
Meanwhile, more details have emerged about Eugene Plotkin. The 26 year-old Russian-born New Yorker is said to have a passion for ballroom dancing. In fact, his lawyer has referred to him as 'a wholesome fellow'. And together with Pajcin, Plotkin is believed to have once wrote, directed and starred in a short movie about a young banker who was involved in a trading scam! Pajcin played the part of a drug dealer. The movie is said to have cost around $20,000 to produce.
US regulators are said to have been alerted to the insider ring when their attention was drawn to one Sonja Anticevic, a 63 year-old retired Croatian seamstress, who allegedly made $2m in two days trading in options in Reebok International. The seamstress saw a 17-fold return on her investment when Reebok announced last August that it was to be acquired by Adidas-Salomon. Ms Anticevic happens to be Pajcin's aunt. She denies wrongdoing.
Messrs Pacjin and Plotkin face around 10 years each in jail if convicted of insider trading.