Everyone’s favorite former Goldman Sachs fixed income analyst was sentenced to fifty-seven months in prison today. That’s at the low end of what prosecutors had asked for, and exactly what Plotkin requested in his plea for leniency. Well, maybe not ‘exactly.’ Plotkin had asked the judge to give him credit for the last 10 months, which he has spent under house arrest. Apparently the judge doesn’t give extra credit for homework.

Ex-Goldman analyst gets prison in insider case [Reuters]

Does anyone know exactly what Eugene Plotkin did as a fixed-income analyst at Goldman Sachs? We’ve wondered and probed and asked but have never been able to get to the bottom of this question. How amazing would it be if he produced some amazing report about how the US housing market was headed for trouble and advised shorting mortgage based derivatives?

An important update on Plotkin after the jump.

Stanislav Shpigelman, the ex-Merrill Lynch analyst sentenced to 37 months in prison for tipping off former Goldman Sachs employees Eugene “Twinkletoes” Plotkin and David Pajcin to news of six pending mergers, said in papers made public last week that his error in judgment resulted from “false promises, deception, intimidation and flattery.” According to the briefing by Shpigelman’s lawyer, Mary Mulligan, his involvement was “not [driven by] the receipt of large sums of money,” which she apparently sees as grounds for seeking leniency.

According to Bloomberg, Shpigelman met Plotkin when he was 19 and studying abroad, introduced by his sister, a colleague of Plotkin at Goldman. Although Plotkin failed in his pledge to help Shpigelman obtain a Goldman internship for that summer, the two kept in touch. The young pup started working at Merrill (an obvious blow to the friendship) in the summer of 2004, and reunited with Plotkin during a meeting at Spa 88, a bathhouse downtown that Urban Daddy has endorsed and that we’ve been unable to separate from the mental image of our grandfathers sitting in the steam room of our local JCC. Moving on! It was at 88 that Plotkin ultimately convinced Shpigelman to get involved in the insider scheme and to “try the grape leaves, they’re a delicacy.”

By Mulligan’s account,

“Plotkin and Pagcin were older, more experienced industry veterans who insinuated their way into Mr. Shpigelman's life by promising the sort of career mentorship that Mr. Shpigelman so desired.”

Then the “gentleman of a certain age” lost money on a deal, and “the combination of the intimidation brought to bear by Plotkin and Pajcin, and Mr. Shpigelman's desire to stay in Plotkin's and Pajcin's good graces led him to agree to provide them with additional information,'' Mulligan wrote. ``Plotkin and Pajcin then traded on this new information.''

Assistant U.S. Attorney Benjamin Lawsky, however, doesn’t buy the sob story and has argued that “Mr. Shpigelman did this for the oldest reason in the book -- greed -- and his desire to make bundles and bundles of money.” While we think most of the defense seems plausible, we’re not exactly sure we’re capable of throwing sympathy at someone who’d be intimidated by a ballet dancer. Though one might make the argument that that’s exactly the type of person who should be spared as much time in the big house as possible.

Ex-Merrill Analyst Says `Intimidation' Led to Leaks [Bloomberg]

**We kid. It was 16. And yes, we’re going through some sort of personal problem that manifests itself in the excessive use of **s. Further explanation TK in our “The More You Know” spot (concerning both the bun in the oven and the **s. And this is JC, for those keeping count at home).

Lately, you can't pick up a newspaper go online without reading about how great Goldman Sachs is. Goldman Sachs has the best bonuses! Goldman Sachs' fourth-quarter profit practically doubled! Goldman Sachs employs 83 and 47%, respectively, of the men and women who belong to my temple. Goldman Sachs this. Goldman Sachs that. It's not like we don't love ourselves some good GS now and then, it's just that their "Everything Is Coming Up Roses!" campaign was starting to get into our craw, a little bit, of late. Which is why we'd be lying if we said it wasn't a little gratifying to learn that former NJ postal worker Jason Smith was just sentenced to 33 months in a federal prison for his role in the "worldwide insider trading ring orchestrated by the former Goldman Sachs employees, David Pajcin and Eugene ["twinkle toes"] Plotkin." It's not like Lloyd Blankfein's going to lose sleep over this. But it might just spoil his 4 o'clock cavier snack and cat nap, just a smidge. We'll take what we can get.

Ex-postal worker gets jail time for insider trading [Reuters]

Yet another member of the insider trading ring alleged led by David Pajcin and Eugene Plotkin has pleaded guilty. You remember this one right? It’s the plot where the plotters seemed to put together a “greatest hits” albumn of every insider trading scheme of the past three decades to hatch their own private world-wide conspiracy. All for a total gain of the awesome sum of, uhm, less than $7 million.

The latest plea comes from one of the most elaborate parts of the plot. Nickolaus Shuster actually moved to Wisconsin to take a job at the plant where Business Week is printed in order to pass information on to his co-conspirators. Business Week, of course, is one of the traditional go-to places for insider trading. Several times over the last few decades, people have been prosecuted for trading on information obtained from advanced copies of Business Week.

All told, though, the entire infiltration scheme seems only have resulted in the plotters making one trade on one stock, for a profit of what we’re told was less than $400,000.

Note to would be insider traders—this particular trick seems to have run its course. Just because some folks made money off it in the past, doesn’t mean it’s going to work for you. Or, as we say, past performance does not guarantee future results. Stealing Business week is officially over.

Printing plant worker admits to insider trading [Reuters]

Of course, this hasn’t actually gone through the trouble of actually happening. Yet. It’s just the latest from the warped minds at the Long Or Short Capital blog. The set up is that Lucy Gao takes out a personal ad inviting readers to a “party” that is taking place in her pants. And Aleksey responds. Now if only LOSC had them being chauffeured around by Warren Buffett and Eugene Plotkin cutting in on their dance, this would be the perfect DealBreaker item.

We were especially happy about how LOSC imagines Aleksey Vayner describing the past week of his life.

Before last week, I was basically nothing having only started my own investment fund, won the grand slam of men’s tennis, outdrinken and outskiied Bode Miller in the winter Olympics, won the Nobel peace prize for the charity which I started, held the Street Fighter II machine in my local arcade for 15 straight hours and bedded 5,437 women. This week, I have accomplished so much more and been named the CEO of Vayner Lehman Stern UBS, after I brokered the deal which brought them together in a merger. The key was getting them to focus on my revolutionary “never lose money” investment strategy.

And for you true DealBreaker fanatics, you may want to tune into Fox’s Inside Edition tomorrow morning. We’ll be making an appearance to talk about Aleksey Vayner at 11:30 AM. See you then!

Aleksey Vayner Responds to the Online Personal Ad of Lucy Gao [LongOrShortCapital.com]

Bruce Carton over on Securities Litigation Watch points out that the latest issue of Fortune magazine has an article on our favorite (alleged) Insider Trading scammers. It’s got everything! Juicy details from the SEC interview with David Pajcin to the first ever media interview with Eugene Plotkin. Hotness.

The article states that in response to the SEC's question, Pajcin

admitted advising many of the people involved in the case to buy Reebok, but only because he thought the stock was a bargain, not because he knew anything about a pending merger.

Plotkin held forth for the better part of seven hours on that subject, talking at mind-numbing length about the metrics he said he had applied to the stock. The SEC's Black then summarized this at length, concluding, "Have we covered all the components of your analysis with respect to Reebok specifically that you can remember, sitting here today?"

Pajcin added a few things: "The correlation of volatilities, historical and implied in terms of the S&P and just a general strong dropoff in the five-day volatility, making new highs, so those are all things I look at."

Pajcin might be a crook but at least he’s a crook whose got nonsense financial speak down cold.

Alleged crook. Whatever.
Fortune Article: "Partners in Crime" [Securities Litigation Watch]

As it turns out, at least one part of the far-flung insider trading scheme allegedly masterminded by former Goldman Sachs employees Eugene Plotkin and David Pajcin was a total bust. Pajcin allegedly sold short shares of Bristol-Myers based on information—namely that an unnamed executive of the company would likely be indicted—passed to him by a high school friend who was serving on a grand jury probe. When no indictments came out the grand jury, Pajcin wound up down around $7000. Doh!

We learn this and other sweet details from Bloomberg’s report on the second member of Plotkin-Pajcin Plot to plead guilty. This time its Jason Smith, a New Jersey mailman.

Smith’s next move will probably be to rat out Plotkin and Pajcin. In July Stanislav Shpigelman, a former Merrill Lynch analyst, pleaded guilty in the case, and is thought to be cooperating with prosecutors. Smith's plea agreement calls for a sentence of between 30 and 37 months, which is a lot better than the 25 year maximum he may have faced had he gone to trial.

N.J. Postal Worker Pleads Guilty in Inside Trade Case [Bloomberg]

We’ve been spending some time trying to clear away the murk and shine some light into the shadows of Jeffrey Epstein’s financial dealings in an effort to provide some, uhm, actual financial reporting related to the sex candal encircling the mysterious money manager. There’s not much that is publicly available but we’re still digging.

What we have discovered, however, is a brief document amending a credit agreement for RELIANT PHARMACEUTICALS, INC. The amendment replaces the administrative agent for the credit. But what caught our eye was the confluence of three DealBreaker subjects all in the same documents.

The signature pages include lines for Morgan Stanley CEO John Mack, who is scheduled to appear before the SEC in connection with allegations of insider trading at Pequot Capital, as well at Jeffrey Epstein, who signs as trustee of the Wexner Children’s Trust II, part of the financial empire of The Limited founding family. And the agent who is being replaced? Goldman Sachs, where alleged insider trading crooks Eugene Plotkin and David Pajcin worked (not to mention the alma mater of that other DealBreaker obsession, Hank Paulson).

Now this is no doubt just a coincidence, and not really a conspiracy to make our heads explode. We should probably just take a deep breath and then post a Venn Diagram illustrating the connections but our diagramist is in meetings off-site.

One additional thought: this is probably the last time you’ll see Epstein’s name coupled with the words “trust” and “children” any time in the near future.

Reliant Consent, waiver and amendment [SEC]

The SEC named three Croatians to the list of defendants in the civil lawsuit it filed over the insider-trading racket alleged to have been led by former Goldman Sachs associate Eugene Plotkin and analyst David Pajcin, bringing the total number of defendants to seventeen. The new defendants are Bruno Verinac, Antun Dilber and Anto Krsic.

Seventeen is almost a mind-boggling number of defendants. What kind of secretive conspiracy involves everyone you know? Was there anyone close to Plotkin and Pajcin they weren’t tipping?

SEC Charges 3 More for Insider Trading [Associated Press in the Houston Chronicle]

The government added three more people to the defendant list in the insider trading case centered around Eugene Plotkin, David Pajcin and Stan Shpigelman. Eugene and David were both Goldman guys, and the younger Stan was an analyst at Merrill. The plot, which was allegedly hatched in a downtown Russian bathhouse, now spans two continents, at least three countries, and includes players as diverse as strippers, Eastern European relatives, a mailman serving on a potentially important business trial and guys working the shipping decks at the plant where Business Week is printed.

SEC adds three more to the insider trading defendants list [WallStFolly]

Eugene Plotkin is a free man. Or as close to being a free man as he’s likely to be for quite some time. On Friday he was released on a $3 million dollar bail bond, on the condition that he remain under house arrest in Rockland County and wear one of those ankle bracelet thingies that Martha Stewart made famous (if not fashionable).

Plotkin Freed on $3M bail, must watch his step [New York Post]

Eugene Plotkin—the alleged ring leader of what is, lets face it, our favorite insider trading scandal—is still in jail. Yesterday’s New York Post reported that Plotkin has been unable to make bail since he was arrested on April 11, unable to convince friends to support the $3 million bond set for his release. Now Plotkin has canned his laywer, Martin Schmukler, a mob-and-drug lord type, and hired of a proper big law firm, white-collar crime lawyer.

His new lawyer, Edward Little (pictured here), was formerly a federal prosecutor and now runs the white-collar-crime practice at Hughes Hubbard & Reed. Little tells the Post that he's confident his client will make bail soon.

Plotkin Fires Attorney [New York Post]

Eugene Plotkin, who allegedly masterminded the Stripper-Eastern Europe-Business Week-Mail Dude-Insider-Trading scam from inside his post at Goldman Sachs, was indicted yesterday. He's now sitting in jail, waiting to make bail. Apparrently the young man has had some trouble coming up with co-signers on his $3 million bail bond.

The NY Post has details about the bail bond haggling.

At a bail hearing yesterday, Plotkin's lawyer, Martin Schmukler, said the aunt and uncle agreed to put their $1 million home on the line. But they don't want to co-sign on the bond, which could make them liable for the entire $3 million if Plotkin fled.

Plotkin's parents are willing to co-sign on the bond, but they are no longer willing to put up the $250,000 in cash they'd promised because his father, Mikhail, was concerned about not having any cushion if his health failed, Schmukler said.

DealBook reports that Goldman confirmed our young Plotkin's been fired from Goldman Sachs. Earlier he was merely under suspension.

Wall St. Scammer to Stay in Slammer [New York Post]

This shot is from Wall Street Folly's screen-caps of CNBC's footage of alleged insider trader and Plotkin ring-member Jason Smith's perp walk. I guess Smith didn't get the Patrick Byrne memo about celebrating this sort of thing.

Many more here.

Add another alleged culprit to the cast of characters of our favorite insider trading scandal. It seems that Jersey City postal worker Jason Smith has been arrested for allegedly leaking confidential information about a grand jury's probe of accounting fraud at Bristol Meyers Squibb.

And to whom did Smith allegedly leak the info? None other than Eugene Plotkin—Harvard grad/competitive dance/indie filmmaker/novelist/Goldman analyst turned alleged crook.

So far we’ve got a shady connection to Eastern Europe, strippers, an Ivy league network of would be criminal masterminds, a Russian bathhouse. And now the postal service. This story keeps getting better.

Another Arrest In Insider Trading Scandal [Associated Press]

More DealBreaker coverage of the Plotkin Plot