Shpigelman Pleads Guilty to Insider-Trading; Indicates That Plotkin ’00 ‘Pressured’ Him To Participate

Merrill Lynch analyst Stanislav Shpigelman pleaded guilty last Friday to providing Harvard alum Eugene M. Plotkin ’00 and David Pajcin insider information in a plot that allegedly earned the pair $6.7 million illegally, according to the Associated Press.

Shpigelman, 23, was an analyst in the mergers and acquisitions division of Merrill Lynch. He admitted to sharing inside information by cell phone to Plotkin and Pajcin. His plea agreement recommends that he serve between three and four years in prison after his sentencing November 17.

In November 2004, Plotkin introduced Shpigelman to Pajcin at a Russian day spa and sauna in lower Manhattan, according to prosecutors.

The SEC complaint said that former Goldman Sachs analysts Plotkin and Pajcin hired Shpigelman to leak information about six mergers or acquisitions that Merrill Lynch was overseeing, including those between Proctor & Gamble and Gillette, Duke Energy and Cinergy, and Reebok and Adidas. According to the complaint, Shpigelman received cash and pledges for a share in profits.

Plotkin’s attorney Edward Little could not be reached for comment this week. Plotkin has pleaded not guilty to charges, while, according to the government, Pajcin is cooperating with authorities.

The Associated Press reported that Shpigelman indicated Plotkin and Pajcin during his plea.

“They pressured me and said that if I helped them they would take care of me,” Shpigelman said, adding that he hoped they would “leave me alone” if he went along with the plan.

Ultimately, though, he told the U.S. District Judge that he acted out of his own free will. Other than the Merrill Lynch plan, Plotkin and Pajcin are accused of hiring two Wisconsin printing plant employees to leak them information from a Wall Street column in BusinessWeek a day before the magazine’s publication.

Federal guidelines recommend that insider-trading sentences include between 37 months to 46 months of prison time, but such guidelines are advisory and not binding. The charge can result in a maximum sentence of 20 years in prison.

—Material from the Associated Press was used in the reporting of this story.
—KATHERINE M. GRAY