The U.S. Securities and Exchange Commission has extended its insider trading case against a couple of former Wall Streeters to include a postal worker who it alleges leaked grand jury testimony to the traders.
The SEC filed securities fraud charges against a New Jersey letter carrier who it claims illegally leaked secret grand jury information to “members of one of the most pervasive insider trading rings ever prosecuted”. The commission says that the new charges bring to 14 the number of people charged in the international scheme that netted at least $6.7 million in illicit gains through tactics that also included stealing information from Merrill Lynch and advance copies of BusinessWeek Magazine.
The new charges allege that, while serving on a federal grand jury investigating Bristol-Myers Squibb Co., Jason Smith leaked information about the proceedings to the ringleaders of the insider trading scheme, co-defendants Eugene Plotkin and David Pajcin, who traded in Bristol-Myers securities based on the information.
The grand jury scheme is the third insider trading scheme that the SEC alleges was orchestrated by Plotkin and Pajcin. In previous complaints, the SEC charged Plotkin and Pajcin with orchestrating a scheme to obtain advance knowledge of mergers and acquisitions transactions being handled by Merrill Lynch, and a scheme to obtain advance copies of a market moving column in BusinessWeek. The complaint also alleges that Smith provided money to Plotkin and Pajcin to use in all of the insider trading schemes in return for a share of the profits. Today’s charges were made in a Third Amended Complaint that is subject to Court approval. None of these allegations have been proven.
“Today’s charges reveal how far and wide this insider trading scheme had spread. The defendants seized every possible opportunity to profit from the theft of information,” said Linda Thomsen, director of the commission’s Division of Enforcement.
SEC announces new charges against insider trading ring
Defendants traded on information from secret grand jury proceedings
- By: IE Staff
- May 11, 2006 May 11, 2006
- 15:15