Insider-Trading Alum Out on Bail

Eugene M. Plotkin ’00 has been released on $3 million bail after being arrested for his involvement in an insider trading ring that includes stock analysts, a Croatian aunt, and at least one exotic dancer. His pretrial hearing will take place on September 6.

According to the criminal complaint filed by the Securities and Exchange commission, Plotkin and former Goldman Sachs analyst David Pajcin organized a “widespread and brazen international scheme of serial insider trading...resulting in at least $6.7 million of illicit gains.”

The complaint says that Plotkin and Pajcin paid forklift operator Nickolaus Shuster a flat fee for him to relay the contents of BusinessWeek’s “Inside Wall Street” column.

Shuster had access to advance copies of BusinessWeek because he worked at a Wisconsin plant where the weekly magazine is printed.

The analysts helped Shuster get that job, acting as professional references in his application to the printing plant, according to the complaint. Shuster read the column to the analysts over the phone every Thursday morning, a full day before the magazine was distributed.

BusinessWeek’s director of communications Kimberley Quinn wrote in an e-mail that the column can move the market and that access to it is “very restricted” before publishing.

“Companies that are being covered in the column remain anonymous until immediately prior to printing, which occurs after the market closes on Wednesday,” she wrote.

Plotkin and Pajcin would use their insider knowledge to purchase shares and options through the accounts of Pajcin’s aunt in Croatia and an exotic dancer whom the analysts met at a “gentleman’s club.”

Mikhail Plotkin, Eugene’s father who reportedly acted on stock tips he received from his son, has also been indicted.

Plotkin and Pajcin were eventually caught when the tremendous windfall they reaped from purchasing Reebok shares on insider information sparked the interest of government investigators, according to the New York Times.

When Shuster was fired from the plant, the analysts hired Juan Renteria to replace him and do the same work, according to the complaint.

According to the complaint, Plotkin and Pajcin also obtained confidential information from Stanislov Shpigelman, 23, a Merril Lynch analyst who has also been charged in the case.

The New York Post reported last Friday that Plotkin must wear an ankle bracelet to track his whereabouts and to keep him under house arrest.

According to the Post, Edward Little, Plotkin’s lawyer in the case, argued in court at his client’s release last Friday that Plotkin will not flee authorities and should not have to wear the bracelet.

“He’s a Harvard graduate. He’s lived here his entire life,” Little said. “There’s no reason to believe he’s a flight risk.”

Little could not be reached for comment yesterday.

Plotkin concentrated in economics at Harvard and joined Goldman Sachs in the summer after his graduation. He was an active member of the Harvard Ballroom Dance Team as an undergraduate, where he conducted workshops for younger members and performed in Arts First, and continued dancing professionally after Harvard.

Former dancing teammate Cesar A. Briceno ’01 was surprised when he heard about Plotkin’s arrest.

“His role on the team was a very positive one,” Briceno said. “I’m hoping in the back of my mind that something’s mixed up.”

—Staff writer Katherine M. Gray can be reached at kmgray@fas.harvard.edu.