I know Goldman Sachs has really become the big fish in Financials now - so maybe they can better screen Russian employees who love to dance.

Here is another NEW one:
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Sergey Aleynikov Should Have Stuck With Ballroom Dancing

NY Magazine
7/6/09

Last Friday, a team of FBI officials arrested Sergey Aleynikov, a 39-year-old former vice-president of Goldman Sachs, at Newark Airport. According to the complaint, Aleynikov had uploaded proprietary information ? including the secret code to unlocking Goldman?s automated stocks and commodities trading businesses ? to an unnamed file-hosting service in Europe just before he resigned from his $400,000-a-year job at Goldman back at the beginning of June. Whether this is a case of international industrial espionage or merely an oopsie, here's the question: Aleynikov, who is being held pending $750, 000 bail, told FBI officials that he had only intended to download "open source" files from the server, and only later realized that he had downloaded "more than he had intended." His wife, for her part, is annoyed that the Fed ruined Fourth of July:

"His wife, Elina, says her husband is innocent. Speaking in a phone interview from the couple?s New Jersey home, she says her husband worked hard for Goldman Sachs and has been a good citizen ? noting he?s lived in the US for 19 years. She seems mystified that federal authorities would arrest him on the eve of a holiday."

Either way, it seems clear that Aleynikov is not nearly so graceful behind the computer as he is on the dance floor. A video of him and Elina dancing to "You Light Up My Life" in a ballroom-dance competition indicates that, should he get himself out of this sticky wicket, he may yet have a future on Dancing With the Stars.

LINKS:
http://nymag.com/daily/intel/2009/07/ ... ynikov_should_have_s.html

http://www.huffingtonpost.com/danny-s ... ial-markets_b_228144.html

http://blogs.wsj.com/deals/2009/07/09 ... -and-market-manipulation/

http://blogs.reuters.com/reuters-deal ... -the-aleynikov-mcmansion/

He was also sentenced to pay back the $6.7 million plus $10,000, and he's not getting out of that since the government froze all the accounts of everyone involved. So he didn't make any money in the end.

Quote:

6.7 million for 5 years in prison - where do I sign up.
With good behavior in a County minimum risk prison in the country side, supplied with 'care' packages from home, will see this dude out in 3 years or less

Ex-Goldman Associate Is Sentenced in Insider Trading Case

New York Times
January 3, 2008, 5:19 pm

A former Goldman Sachs associate accused of masterminding one of the most unusual insider-trading conspiracies in recent memory, one that reaped about $6.7 million, was sentenced Thursday to nearly five years in prison.

Eugene Plotkin, 28, a Harvard graduate who dabbled in filmmaking and ballroom dancing, was sentenced to four years and nine months by a federal district judge in Manhattan. His sentence was the minimum set in a plea agreement with prosecutors; Mr. Plotkin faced as much as 71 months in prison.

Prosecutors said that Mr. Plotkin and a former coworker, David Pajcin, orchestrated one of the widest-ranging and most unusual insider-trading schemes since the days of Ivan Boesky. Theirs was a three-part scheme involving a former Merrill Lynch analyst, a New Jersey postal worker who served on a grand jury, two workers at a BusinessWeek printing press and an exotic dancer.

The bulk of the conspiracy?s profits stemmed from tips from the former Merrill analyst, Stanislav Shipigelman. Mr. Plotkin and Mr. Pajcin met with the recent college graduate at a Russian day spa in lower Manhattan, convincing him to illegally divulge information on upcoming mergers, including Adidas-Salomon?s acquisition of Reebok International. Those tips earned the network about $6.2 million.

In the second scheme, Mr. Plotkin and Mr. Pajcin hired Nickolaus Shuster and then Juan Renteria to work at a BusinessWeek printing plant in Wisconsin. The goal was to trade illegally on information from prepublication issues of the magazine.

The third scheme involved Jason C. Smith, a Jersey City postal worker who was serving on a grand jury investigation of Bristol-Myers Squibb. Based on information Mr. Smith provided in spring 2005, Mr. Pajcin sold short 2,000 shares of Bristol-Myers stock, betting that the price would fall. But the trades proved unprofitable.

Mr. Pajcin traded in several accounts, including those of his girlfriend, an exotic dancer, and his aunt, a retired underwear seamstress in Croatia. He and Mr. Plotkin were also accused of passing their information to a broad swath of tippees, including Mr. Plotkins father and several international investors.

When he pleaded guilty in August, Mr. Plotkin, was the last major player in the scheme to do so. Mr. Pajcin pleaded guilty early on, while Mr. Shpigelman and Mr. Smith pleaded guilty last year.

Ex-Analyst Gets Prison

By LARRY NEUMEISTER -- AP -- 1/05

A former analyst at Merrill Lynch & Co. Inc. who pleaded guilty to insider trading was sentenced Friday to three years and a month in prison for his part in a scheme that used gabby investment bankers and leaked copies of a market-moving magazine.

Stanislav Shpigelman, 24, of Brooklyn, had admitted tipping other participants who made more than $6.7 million from October 2004 to August 2005. At the time, he worked in Merrill Lynch's mergers and acquisitions division.

In a plea deal he signed with prosecutors, Shpigelman admitted to a single count of conspiracy to commit insider trading in return for a recommendation that he serve from three to four years in prison.

His lawyer, Mary Mulligan, and family members asked U.S. District Judge Kenneth M. Karas to sentence Shpigelman to less than three years in prison.

Karas, though, called Shpigelman the "critical component" in a scheme that could make others millions of dollars, though Shpigelman conceded receiving only $10,000 for providing tips on several mergers and acquisitions.

The judge noted that Shpigelman sometimes sought out secret information about deals from others at his company and did so repeatedly.

"It is unfortunately a classic insider trading scheme," Karas said.

He said Shpigelman, a "classic overachiever" who was hired because he was among the best and the brightest in school, violated the oath of every investment house worker not to divulge inside secrets.

The judge said he imposed the prison term with a "heavy heart" because Shpigelman had one of the nicest families he had ever known and because it was clear Shpigelman would never violate the law again. But he said it was the kind of case that would be talked about in investment circles for years and the right message had to be sent.

The case originated after regulators noticed unusually high trading volume before a merger announcement and discovered that a 63-year-old retired seamstress in Croatia - the aunt of one of the defendants - had made more than $2 million.

Investigators soon realized they had found a beehive of inside trading activity that seemed to rely on any method its participants could dream up. At one point, they even discussed getting exotic dancers to coax stock secrets from investment bankers, the government said.

Before he was sentenced, Shpigelman said: "My actions were foolish and I regret considerably what I have done."

Assistant U.S. Attorney Benjamin Lawsky said Shpigelman provided others in the scheme "the most valuable inside information there is on Wall Street" - exact information about when deals would occur.

"Shpigelman did this for the oldest reason in the book - greed and the desire to make bundles and bundles of money," he said.

The case also resulted in the arrests of a Milwaukee forklift operator who allegedly obtained early copies of a market-moving column in BusinessWeek magazine and a New Jersey grand juror who allegedly disclosed secrets about an accounting fraud probe.

But at the heart of the scandal was David Pajcin, a former Goldman Sachs Group Inc. analyst who is cooperating with the government, prosecutors said.

Prosecutors say Pajcin and Eugene Plotkin, 26, of Manhattan, a Harvard-trained former Goldman Sachs analyst who has pleaded not guilty to charges in the case, made more than $6.7 million through inside trades. Plotkin is awaiting trial.

Investigators said Plotkin introduced Pajcin to Shpigelman in November 2004 at a Russian day spa and sauna in lower Manhattan.

The forklift operator, Nickolaus Shuster, 25, has pleaded guilty to conspiracy to commit insider trading and insider trading and awaits sentencing.

The grand juror, Jason Smith of Jersey City, N.J., has been sentenced to two years and nine months in prison after pleading guilty to conspiracy and insider trading. At sentencing, he said he had made a "terrible mistake."

If you remember the news articles about "Goldman?s Plotkin Locked Up for Trading Violation?But Boy, Can He Rumba"...

( Somehow the articles are missing from the jclist archives - Here is the first one again )

http://www.observer.com/20060424/2006 ... on_pageone_featurebox.asp

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And here is a new follow up:
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N.J. Grand Juror Sentenced for Leaks

By LARRY NEUMEISTER -- Associated Press -- Dec. 12

NEW YORK ? A man who admitted leaking grand jury secrets about a probe of the Bristol-Myers Squibb Co. was sentenced to two years and nine months in prison Tuesday by a judge who said he wanted to send a message that those who violate grand jury security will go to prison.

Jason Smith, 30, of Jersey City, N.J., apologized and called what he did a "terrible mistake" before U.S. District Judge Kevin P. Castel imposed the sentence along with a $6,000 fine, rejecting a request from his defense lawyer that Smith serve no jail time.

Castel said Smith "by his greedy actions undermined a fundamental Constitutional right." He ordered him to report to prison Jan. 29.

The judge noted that the system of letting a grand jury decide whether a person should be charged with a crime predates the adoption of the Constitution.

The sentencing came in an insider trading case that was portrayed by federal authorities as unique in the history of those prosecuted for trying to cheat the stock market.

The corruption of Smith was one facet of an alleged multi-pronged approach that included getting a forklift operator to steal early copies of a market-moving column in BusinessWeek magazine and considered using strippers to coax secret stock tips from investment bankers.

Smith, a postal worker, pleaded guilty to conspiracy to commit insider trading, securities fraud and criminal contempt.

Assistant U.S. Attorney Benjamin Lawsky said Smith's crime "undermined the heart of our criminal justice system."

"It is fundamental to everything we do that when prosecutors go in, we know it's secret," he said.

Smith's lawyer, Frank Handelman, had asked the judge for leniency for his client, saying Smith suffered from depression and had taken responsibility for his crimes as soon as they were discovered.

From 2003 to 2005, Smith served on a New Jersey grand jury investigating accounting fraud accusations against Bristol-Myers and several of its executives. He allegedly leaked the grand jury information to a former Jersey City high school friend, David Pajcin, a former Goldman Sachs analyst who is cooperating with the government.

Prosecutors say Pajcin then teamed with Eugene Plotkin, of Manhattan, a Goldman Sachs Group Inc. analyst, to trade on the information and to tip others to trade in Bristol-Myers securities.

Authorities said the plot involving grand jury information did not result in any profits, though the wider scheme is estimated to have made profits of about $7 million for the participants.

On June 14, 2005, the grand jury in New Jersey returned an indictment against two former Bristol-Myers executives, charging them with conspiracy and securities fraud.

The probe resulted in a deferred prosecution agreement between Bristol-Myers and prosecutors in New Jersey that would likely spare the company from prosecution.

In April, the FBI arrested Plotkin and his college friend, Stanislav Shpigelman, 23, of Brooklyn, accusing them of benefiting from the scandal. Shpigelman was an analyst at Merrill Lynch & Co. Inc.'s mergers and acquisitions division.

Shpigelman has pleaded guilty to a single count of conspiracy to commit insider trading in a deal that calls for him to serve between three and four years in prison after he is sentenced in January. Plotkin awaits trial.

The case was discovered by regulators who noticed unusually high trading volume before a merger announcement.

http://www.chron.com/disp/story.mpl/ap/fn/4396359.html