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January 4, 2008

Goldman Sachs Man Sees 5 Year Sentence

by Stewart Douglas

Story link: Goldman Sachs Man Sees 5 Year Sentence

An ex-employee of investment bank Goldman Sachs has today been sentenced to some five years in custody following the unravelling of an intricate insider dealing plot which netted $6.7 million in investment profits, following a lengthy investigation into the allegations made in 2006.

Having been arrested almost two years ago on suspicion of involvement in insider trading, a criminal offence which carries substantial sentences, Eugene Plotkin formerly of Goldman Sachs was convicted after it was revealed that he had played a part in an elaborate scheme which involved the theft of pre-published industry magazines.

In addition to his five year custodial sentence, Plotkin was also forced to repay the $6.7million  he is said to have profited, along with a $10,000 fine considering his current financial circumstances.  The sentence reflects the severity of insider trading, which is seen as distortive of fair market conditions and is treated legally in the same bracket as serious fraud.

The plot Mr Plotkin was involved in saw the theft of several copies of BusinessWeek, and inside magazine, which allowed him to benefit from information which was not at the time available to the public at large.  As a result, Plotkin was able to capitalise on the rises in share price derived from the backlash of media reports, before selling his shares at a substantial profit.

However his elaborate scheme did not go unnoticed, and police were alerted prior to his arrest in April 2006 of the alleged details of the transactions.

Speaking today on his conviction, Mr Plotkin who pleaded guilty in front of US District Judge Richard Howell said he was both ‘ashamed’ and ‘deeply sorry’ for his actions, which earned him $6.7million initially but have now led to his five year sentence and the corresponding financial penalties imposed.

 

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