Federal prosecutors have charged junior employees at Merrill Lynch & Co. and Goldman Sachs Group Inc. with making $6.7 million on insider-trading schemes involving takeover leaks and magazine stock tips.
Stanislav Shpigelman, 23, a mergers-and-acquisitions analyst at Merrill, gave secret information on six pending deals to two Goldman employees in exchange for cash, U.S. Attorney Michael Garcia claimed in a criminal complaint unsealed Tuesday.
In a separate scheme, the Goldman colleagues, Eugene Plotkin, 26, and David Pajcin, 29, illegally obtained the names of stocks mentioned in BusinessWeek before the magazine was mailed.
The charges mark the first insider-trading scandal to touch Merrill or Goldman, in more than two years. Shpigelman passed on details of some of last year’s largest M&A transactions, including Procter & Gamble Co.’s $61 billion purchase of Gillette Co., the government said.
“I’ve never seen a case involving so many different types of efforts to obtain information illegally,” said Mark Schoenfeld, the regional director in New York for the Securities and Exchange Commission, which brought a civil suit.
Plotkin and Pajcin led a trading ring that netted $6.4 million on the M&A tips, according to Garcia’s suit. With advance notice of “stocks favorably mentioned in BusinessWeek’s ‘Inside Wall Street’ column,” they made $340,000, the government said.
