A former Goldman Sachs Group Inc bond analyst pleaded guilty on Tuesday to helping lead a far-flung insider trading scheme involving tips about pending mergers and stolen copies of BusinessWeek magazine 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 24.
Prosecutors accused Plotkin and another former Goldman employee of trading off tips leaked by an ex-Merrill Lynch and Co Inc investment banking analyst and also from stolen advance copies of BusinessWeek they obtained from printing plant workers.
They also got information from a New Jersey grand juror about an investigation of drug maker Bristol-Myers Squibb Co, prosecutors said.
Continue Reading Below
Under a plea agreement, Plotkin is expected to be sentenced to anywhere from 4-3/4 to nearly six years in prison. He also agreed to forfeit $6.7 million. He is due to be sentenced on November 30.
I understood what I did was wrong and against the law, he told U.S. 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 Co's acquisition of Gillette Co and Adidas' 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 already pleaded guilty in the case.
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 BusinessWeek magazine 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, while charges are still pending against the other employee, Juan Renteria.
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 Bristol-Myers to Pajcin and Plotkin.