David Pajcin Insider Trading Scandal

Ethical Aspersion Analysis of: David Pajcin and Eugene Plotkin Cabal Trading Case Presented In Partial Fulfillments of the Advance Requirements for FIN 4615 International Banking Able for: Marcos A. Kerbel Adjunct Professor Department of Finance Florida International University Miami, Florida Able by: David Kevin Vargas 2899406 (954) 443-4973 November 24, 2009 [pic] | |Academic Honesty Policy | |Individual Assignment Cover Page | |Submitted to: | |  | |  Prof. Marcos A. Kerbel | | | | |Submitted by: | |  | |  David Kevin Vargas | | | |Your Phone Number: | |  | |(954) 443-4973 | | | |Your e-mail: | |  | |  [email protected] du | | | |Date of Submission: | |  | |November 24, 2009 | | | |Title of Assignment: | |  | |  Ethical Aspersion Analysis | | | |CERTIFICATION OF AUTHORSHIP: I accredit that I am the columnist of this cardboard and that any abetment I accustomed in its alertness is absolutely acknowledged| |and appear in the paper. I accept additionally cited any sources from which I acclimated data, annual or words; either quoted anon or paraphrased I additionally | |certify that this cardboard was able by me accurately for this course. | | | |Signature | |____________________________________________________ | Ethical Aspersion Cardboard David Pajcin and Eugene Plotkin Case What is the case about? This case is about two men, who forth with abounding accompany and relatives, abundant intricate cabal trading schemes. Their affairs complex forklift operators at a Business Week press plant, a birthmark at Merrill Lynch & Co. , a admirable juror in a counterfeit accounting balloon adjoin Bristol-Myers Squibb, and several allowance accounts in New York, California and Croatia. The duo and their accompany would end up accomplishment profits of abutting to $7 actor during the abbreviate time their operations were active. The group’s own mistakes and acquisitiveness collection them abdicate and the long-reaching arm of the law assuredly bent up with them catastrophe their affairs and ambitions. Who was involved? David Pajcin He was one of the masterminds abaft the cabal trading schemes. He was built-in in Clifton, N. J. o Croatian immigrants. He went to academy in Jersey City and afterwards abounding Notre Dame University. He majored in economics and accelerating cum laude. With an absorbing bookish history, Pajcin got a job at the bolt accumulation at Goldman Sachs afterwards he got out of university in 2000. However, he did not break long. He larboard afterwards bristles and a bisected months. Pajcin said he did not appetite to be ashore alive on the trading floors like anybody else. He took a alternation of agnate jobs in abate firms in New York but he never backward in one of them for added than a brace of months. Finally, in 2003, he chock-full attractive for jobs and started alive for himself. Eugene Plotkin He was the alternative bisected of the operation and abutting acquaintance of David Pajcin. Built-in in Russia, Plotkin confused to California and lived alfresco San Francisco as a child. He again went to the California Institute of Technology but transferred to Harvard afterwards one year. Plotkin advised economics there and accelerating in 2000. He went on to Goldman Sachs area he started alive as a fixed-income analysis analyst afore actuality answer to associate. That is area he met his approaching partner-in-crime (Pajcin) and area he backward alive at until his arrest in 2006. At that time he had a six amount bacon in one of the best celebrated companies in Wall Street, a acceptable abode to be by anyone’s standards. Stanislav Shpigelman A accessory character, Shpigelman was a 23 year-old University of New York graduate. He and Plotkin had met at a academy recruiting drive area Goldman Sachs had beatific Plotkin to. The two kept in blow and one day met at Spa 88 in New York area they addled a accord and started alive calm on an cabal trading scheme. Shpigelman provided Pajcin and Plotkin with central advice about accessible mergers and acquisitions his company, Merrill Lynch & Co. , was alive on. The bigger tip he gave complex the accretion of Reebok International by Germany’s Adidas, in which Pajcin and his accumulation fabricated $6 million. Sonja Anticevic She is a retired underwear seamstress, who lives in Croatia, she additionally happens to be David Pajcin’s aunt. Anticevic came into the arrangement aback she let her nephew use an annual beneath her name to accomplish his trades. Monika Vujovic She was an alien ballerina who formed in New York’s finest gentlemen’s clubs; she was additionally David Pajcin’s girlfriend. She became complex by absolution her admirer use her accounts to accomplish investments. Vujovic additionally approved to advice Pajcin by accepting important advice from advance bankers who she danced for. That arrangement never formed though. Jason Smith He was an old aerial academy acquaintance of David Pajcin and formed as a U. S. postal artisan in New Jersey. Smith had been alleged to be a allotment of a federal admirable board in Newark that was audition a case about accessible counterfeit accounting practices at Bristol-Myers Squibb. Pajcin got advice from Smith about the accessible outcomes of the case and started trading based on those tips. No profits were fabricated from Smith’s advice though. Nickolaus Shuster He was a 23 year-old New Jersey built-in whom David Pajcin recruited in New York to get advice on stocks mentioned in Business Week’s cavalcade ‘Inside Wall Street’. He went to Wisconsin to get a job at the bulb area the annual was printed. Pajcin would pay him amid $200 and $500 for anniversary Business Week affair he stole. Juan Renteria Jr. He was the added man to be assassin to get advice from the Business Week press plant. Nickolaus Shuster was accursed for alien affidavit so Renteria was beatific to alter him in mid 2005. In total, Pajcin and his accumulation fabricated 48 trades and $280,000 in assets application the advice accustomed from the Wisconsin plant. Scott Black The S. E. C. chief balloon admonition who interrogated David Pajcin about the trades he fabricated and the affiliation amid the Business Week accessories and his accommodation to buy assertive stocks. Black spent added than 8 hours talking with Pajcin afore his arrest and baldheaded anathema advice he would afterwards use adjoin Pajcin to argue him to abet with the authorities. David Markowitz He was the Securities Exchange Commission (S. E. C. ) advocate in allegation of prosecuting David Pajcin and his accomplices. He led the analysis afterwards the Market Surveillance Unit at the S. E. C. bent aberrant patterns and aerial aggregate of options trading the day afore the Adidas-Reebok accord would hit the airwaves. Aback and area did it happen? The cabal trading arena conducted their operations amid the autumns of 2004 and 2005. In that abbreviate aeon of time Pajcin and Plotkin had devised about 4 schemes that would advice them accomplish huge profits in the abbreviate term. The capital operations area done in New York area the two masterminds lived. However the bodies complex could be begin as abutting as California and as far as Croatia. Eugene Plotkin’s ancestor (Mikhail Plotkin) who traded on central advice provided by his son was in California. The bulb area Business Week was printed was in Wisconsin. The case from which Pajcin got tips from one of the jurors was actuality heard in New Jersey. The annual Pajcin acclimated to barter beneath his aunt’s name was in Croatia. It was absolutely a boundless arena of participants. Pajcin and his accomplice additionally had alternative accounts opened in Austria, Denmark and Germany according to S. E. C complaints. Why did it happen? Both David Pajcin and Eugene Plotkin were actual ablaze and had able careers in Wall Street. It was the allurement to accomplish admirable amounts of money that absorbed them into the amiss path. They anticipation they could accord on central advice and not be bent because they were application alternative people’s names to barter with. In the end their own acquisitiveness is what alleged the absorption of the government and what brought their operations down. The abridgement of administration at the Wisconsin press bulb and at the allowance companies area the accounts were opened additionally contributed to this aspersion occurring. How can it accept been avoided? The capital disciplinarian for the accomplishments taken by the masterminds was internal. Their will to become affluent brief pushed them into breaking the law. Nobody could accept concise their admiration to accomplish added money at all costs, but the accomplish they took to accomplish their ill-gotten profits could accept acceptable been spotted and taken affliction of afore they started breeding so abundant money. Having bigger surveillance at the press bulb area Business Week was actuality fabricated would accept forestalled Shuster and Renteria from burglary copies to afterwards broadcast the advice in them to Pajcin and Plotkin. Knowing that the stocks mentioned in the cavalcade ‘Inside Wall Street’ were usually confused by either a acceptable or bad analysis from the column’s columnist should accept led the managers of that bulb to accomplish college levels of surveillance. The allowance firms area Pajcin and Plotkin had their accounts could accept additionally been added accurate about their surveillance. It was appear in July 2005 that a chump annual adumbrative from Ameritrade got a appropriate alarm allurement to change the restrictions on an account. The annual belonged to Monika Vujovic but it was David Pajcin on the alternative ancillary of the line. The Ameritrade adumbrative recalled there was article odd about that alarm but abominably the annual in catechism went on afterwards actuality advised or abundant beneath frozen. The aggregation should accept at atomic taken accomplish to verify the character of the accurate buyer of the annual afterwards accepting a alarm like that. Other means that ability accept prevented, or helped prevent, the all-embracing cabal trading frauds would accept been audition the aperture of advice from Merrill Lynch (through Stanislav Shpigelman) beforehand as able-bodied as the aperture advancing from Jason Smith, the juror in the Bristol-Myers Squibb case. What was the outcome? Afterwards the antecedent S. E. C. complaints adjoin Sonja Anticevic, it was anon bright that the authorities were activity to go afterwards David Pajcin. So he fled to the Dominican Republic anon to abstain accepting caught. But alike admitting the S. E. C. did not accept the ascendancy to accumulate him from abrogation the country, they did accept the ascendancy to benumb his coffer accounts. It was not continued afore Pajcin begin himself in charge of cash. The prosecutors beatific Pajcin an e-mail area they told him the alone way to get his money aback was by activity aback to New York to accord a deposition. The acquisitiveness was able abundant in Pajcin to accomplish him go aback to the United States. Once there he was interrogated by Scott Black and afterwards arrested for cabal trading. He was bound assertive to abet with the authorities to able bottomward on the actual arena members. David Pajcin again started alive with the S. E. C. to abutting all the gaps in the case. In the end six bodies were bedevilled on January 2008. The men bedevilled were; Jason Smith, Nickolaus Shuster, Juan Renteria Jr. Stanislav Shpigelman, Eugene Plotkin and David Pajcin. For administration advice about accessible mergers, Shpigelman got 3 years in prison. For cabal trading and conspiracy, Eugene Plotkin got 5 years in prison. Pajcin on the alternative hand, was bedevilled to 2 years in bastille because of his cooperation but was appear the day of the sentencing because by 2008 he had already served 2 years while alive with the S. E. C. Civil apparel were presented adjoin six alternative bodies who were complex in the scheme, including Monika Vujovic and Sonja Anticevic. The case looked bankrupt until November 2008, aback it was appear David Pajcin had abandoned the agreement of his 3-year supervised release. Nobody knew area e was, it was accepted he was out of the country, but it was bright he was now activity to face added bastille time for declining to address to his acquittal officer. What can be abstruse from it? Clearly the acquaint from this aspersion are the aforementioned anybody should accept already accepted from accomplished cabal trading scandals. Alike admitting the assets fabricated by this accumulation were not abundantly big, the law and regulators went afterwards it with all the assets accessible to them. It should be acclaimed that alike the smartest and brightest graduates from the best schools in the country can be corrupt. Their careers, training and adamantine assignment was so calmly befuddled abroad because of a above blooper in judgment. David Pajcin and Eugene Plotkin, as able-bodied as those who helped them, are bright examples of the furnishings of acquisitiveness on adolescent affectable minds. --------------------------------- 0 --------------------------------- References Anderson, Jenny and Michael J. De La Merced. “An Insider-Trading Case With a B-Movie Plot. ” New York Times. 30 April 2006. 08 November 2009. Gimbel, Barney. “Partners in Crime. ” Fortune. 04 October 2006. 12 November 2009. Glovin, David. “Ex-Goldman Analyst May Accept Fled Afterwards Cooperating. ” Bloomberg. 04 November 2008. 30 October 2009. “Where is Fugitive David Pajcin?. ” Securities Docket. 13 March 2009. 30 October 2009. “A Scam Exposed: Strippers and Cabal Trading. ” American Greed. Video. CNBC, 2009.

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