Youthful US bankers charged over huge insider trading scandal

AFP

US authorities charged a clutch of hotshot young traders connected to Goldman Sachs and Merrill Lynch over what they described as one of the biggest insider trading cases ever uncovered.

The Securities and Exchange Commission (SEC) said the "brazen" trading scheme -- which ran the gamut of topless dancers, covert information and stolen magazines -- netted the individuals at least 6.7 million dollars.

The top US market regulator said the masterminds were Eugene Plotkin, 26, a research analyst in the fixed income division of Goldman Sachs, and David Pajcin, a 29-year-old former employee of the premier bank.

Plotkin and Pajcin persuaded a mergers and acquisitions analyst at Merrill Lynch, Stanislav Shpigelman, 23, to provide tips on upcoming mergers in return for a share of the trading profits, the SEC alleged.

It said they also recruited two other young men to obtain jobs at a printing plant in Wisconsin to steal advance copies of Business week magazine, and then traded in companies discussed favourably by the influential publication.

"Plotkin and Pajcin also contemplated various schemes involving exotic dancers, including having them garner information from bankers while dancing, and using them to induce investment bankers to provide Plotkin and Pajcin with information," the SEC further alleged in a statement.

Mark Schoenfeld, director of the SEC's northeast regional office, said: "This fraud is one of the most widespread, varied and premeditated insider trading rings we have ever prosecuted.

"The defendants sought out individuals working in our nation's leading financial institutions hoping to get them to betray their employer, their clients and the investing public," he said.