LAWFUEL – The Law Newswire – MICHAEL J. GARCIA, the United States At…

LAWFUEL – The Law Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced today that EUGENE PLOTKIN, a former Associate in the Fixed Income Research Division
at Goldman Sachs & Co., pleaded guilty in Manhattan federal court
to conspiracy and securities fraud charges. The charges against
PLOTKIN arose from his role in an international insider trading
network that resulted in more than $6.7 million in illicit gains.
At today’s proceeding before United States Magistrate
Judge DEBRA FREEMAN, PLOTKIN pleaded guilty to one count of
conspiring to commit insider trading and multiple counts of
insider trading. During the proceeding, PLOTKIN admitted his
culpability in three insider trading schemes.

According to an Indictment previously filed against
PLOTKIN, as well as statements made by PLOTKIN in connection with
his guilty plea, PLOTKIN ran a multi-faceted scheme to unlawfully
trade on inside information from a number of sources, including:
(1) STANISLAV SHPIGELMAN, an analyst at Merrill Lynch who
provided information concerning numerous Merrill Lynch corporate
deals; (2) NICKOLAUS SHUSTER and JUAN RENTERIA, two employees of
a Wisconsin printing plant who stole advance copies of Business
Week magazine and provided inside information from the magazine’s
“Inside Wall Street” column; and (3) JASON SMITH, who, while
serving as a federal grand juror in New Jersey, provided
information about the investigation of Bristol-Myers Squibb
Company. SHPIGELMAN, SHUSTER, SMITH and DAVID PAJCIN, another
former Goldman Sachs & Co. employee who played a central role
with PLOTKIN in the insider trading schemes, have all since
pleaded guilty. The charges against RENTERIA are still pending;
the defendant is presumed innocent unless and until proven
guilty.

Scheme To Trade on Inside Information Regarding
Merrill Lynch Merger and Acquisition Deals
PLOTKIN’s plea today related to, among other things,
his efforts to obtain inside information from co-conspirator
STANISLAV SHPIGELMAN. SHPIGELMAN, who at the time was working as
an investment banking analyst in the Mergers and Acquisitions
Division of Merrill Lynch, provided PLOTKIN and PAJCIN with
inside information concerning numerous pending mergers and
acquisitions. In exchange for cash payments and promises of
future payments based on a percentage of profits, SHPIGELMAN
provided PLOTKIN and PAJCIN with information concerning
approximately six different pending mergers or acquisitions being
handled by Merrill Lynch, on some of which SHPIGELMAN had worked
directly. This allowed PLOTKIN and PAJCIN, and others with whom
they shared the inside information, to purchase securities based
on knowledge of the deals prior to the public announcement of the
transactions. They then liquidated those positions after the
public announcement of the transactions, thus locking in the
profits resulting from the rise in stock prices caused by the
public announcement. With respect to the one acquisition alone –
– Reebok’s acquisition by Adidas — Reebok’s common stock price
increased by 30 percent from its closing price the previous day.
Scheme To Trade on Inside Information Obtained From
Pre-Publication Access to Business Week and
the “Inside Wall Street” Column PLOTKIN also pleaded guilty to counts related to a second scheme to gain insider trading information from the
“Inside Wall Street” column of Business Week Magazine.

At the same time that PLOTKIN was trading on the Merrill Lynch deal
information from SHPIGELMAN, PLOTKIN and PAJCIN bribed RENTERIA
AND SHUSTER, who worked at the printing plant where Business Week
was produced, to assist in obtaining inside information from the
unpublished magazines.

RENTERIA and SHUSTER provided PLOTKIN and
PAJCIN with the names of stocks favorably mentioned in Business
Week’s “Inside Wall Street” column one trading day before the
column was available to the public. As a result, PLOTKIN and
PAJCIN traded in approximately 20 different stocks one day before
the favorable review of those stocks was mentioned in Business
Week. PLOTKIN and PAJCIN then sold the “Inside Wall Street”
stocks, after the “Inside Wall Street” article had become public
and the article influenced the stock prices of the stocks
mentioned in the column.

Scheme To Trade on Inside Information From a Grand Juror Leaking
Details of Federal Grand Jury Investigation into Bristol-Meyers
PLOTKIN also pleaded guilty to an insider trading
charge relating to a third scheme to gain inside information from
SMITH, a grand juror in New Jersey who reported to PLOTKIN and
PAJCIN the details of a federal criminal investigation into the
Bristol-Myers Squibb Company. SMITH, a former employee of the
U.S. Postal Service, learned confidential information while
serving as a grand juror during a federal criminal investigation
into accounting fraud allegations against Bristol-Myers and
several Bristol-Myers executives. SMITH provided this
information to PLOTKIN and PAJCIN, who traded and tipped others
to trade in Bristol-Meyers securities, betting that the stock
price would decline once the outcome of the grand jury
investigation was announced.

As a result of the various charges to which he pleaded
guilty, PLOTKIN faces a maximum of 165 years in prison.
PLOTKIN, 28, resides in Rockland County, New York.
Mr. GARCIA, a member of the President’s Corporate Fraud
Task Force, praised the efforts of the Federal Bureau of
Investigation for its investigation of this matter. Mr. GARCIA
also expressed gratitude to the Securities and Exchange
Commission, which filed civil insider trading charges against
PLOTKIN and numerous other co-conspirators.

Assistant United States Attorneys HELEN V. CANTWELL and
GLEN G. McGORTY are in charge of the prosecution.