Ex-Goldman Sachs & Co. Employee Pleads Guilty To Operating Multi-Million Dollar Insider Trading Scheme

Former Goldman Sachs & Co. Associate Eugene Plotnik has pled guilty to conspiracy to commit securities fraud, in addition to eight counts of insider trading. The charges carry a maximum of 165 years in prison.

Plotnik had been charged with running a “multi-faceted,” multi-million dollar scam that used inside information from at least three sources to conduct trading. The sources included a Merrill Lynch analyst, a federal grand juror, and two printing press employees that stole advance copies of a business publication with nonpublic information.

As part of his plea agreement, however, Plotnik promised that he would not appeal a lighter sentence ranging from 4 years and 9 months to 5 years and 11 months in prison. He also agreed to repay the money. More than $6.7 million acquired from the scheme is in illegal gains. Federal authorities have already frozen bank accounts to secure most of the funds.

According to prosecutors, the defendants in this operation at one point considered using strippers to persuade investment bankers that had insider information about upcoming acquisitions and murders to reveal stock tips. They also used the names of an exotic dancer and relatives to front accounts. The SEC has charged 13 people for their involvement in the scam.

Federal authorities began an investigation in 2005 when they noticed irregular trading activities right before Adidas bought Reebok. They became suspicious after a 63-year-old retired Croatian seamstress made several million dollars when she made call options before the deal. She turned out to be related to David Pajcin, the other Goldman Sachs employee accused of leading the scam. Pacjin and Plotnik traded in at least 25 stocks.

If you have lost money because members of the securities industry have chosen to commit securities fraud, you should contact Shepherd Smith and Edwards immediately. We help investors that are the victims of insider trading scams and other kinds of fraud schemes recoup their losses.

Contact Shepherd Smith and Edwards today.

Related Web Resources:

Ex-Goldman banker pleads guilty to insider trading, MarketWatch, August 28, 2007
Ex-Goldman Sachs Worker Pleads Guilty, ABC News, August 28, 2007