U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20607 / June 2, 2008
Securities and Exchange Commission v. Sonja Anticevic, et al., 05 Civ. 6991 (KMW) (S.D.N.Y.)
Court Enters Final Consent Judgments Against Plotkin, Shpigelman, Smith, and Santana in Widespread Insider Trading Scheme
The United States Securities and Exchange Commission announced that on May 22, 2008, the Honorable Kimba M. Wood, Chief United States District Judge for the Southern District of New York, entered final consent judgments against defendants Eugene Plotkin ("Plotkin") and Jason C. Smith ("Smith"), and on May 29, 2008, entered final consent judgments against defendants Stanislav Shpigelman ("Shpigelman") and Elvis Santana ("Santana"), in an action filed in 2005 by the Commission, charging 17 defendants with collectively engaging in a widespread and brazen insider trading scheme, which netted almost $7 million in illicit gains, through trading in at least 26 stocks. Judge Wood ordered that each of the above-referenced defendants be enjoined from future violations of the federal securities laws, including the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Judge Wood further found Shpigelman liable to pay disgorgement of $12,000, plus prejudgment interest of $724.36, and found Santana liable to pay disgorgement of $475,151.79, plus prejudgment interest of $23,172.26, plus any interest that accrued in a brokerage account in his name controlled by Goldman Sachs Execution & Clearing, LP (the "Account") between October 18, 2007 and the date on which Santana causes the funds in the Account to be transferred to the Clerk of Court in satisfaction of the final judgment. Under the terms of the settlements with Plotkin and Smith, the Commission did not request, and Judge Wood did not order, disgorgement against Plotkin and Smith because neither of them received any substantial ill-gotten gains from the charged conduct. Under the terms of the settlements with Shpigleman, Plotkin and Smith, the Commission did not request, and Judge Wood did not order, penalties against Shpigelman, Plotkin and Smith based upon their prison sentences in parallel criminal proceedings. Under the terms of the settlement with Santana, the Commission did not request, and Judge Wood did not order, penalties against Santana based upon the sworn statements in his statement of financial condition.
The Commission's Fourth Amended Complaint (the "Complaint"), alleged that Plotkin, along with co-defendant David Pajcin, orchestrated three separate insider trading schemes based upon trading in material non-public information stemming from Merrill Lynch (the "Merrill Lynch Scheme"), Business Week magazine (the "Business Week Scheme") and grand jury proceedings in New Jersey concerning Bristol-Myers Squibb Co. (the "Grand Jury Scheme") (collectively, the "Schemes"). Based upon his involvement in the Schemes, the Complaint charged Plotkin with violations of Section 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 14e-3 thereunder, as well as violation of Section 17(a) of the Securities Act of 1933 ("Securities Act"). The Complaint alleged that Shpigelman leaked confidential non-public information in connection with the Merrill Lynch Scheme, and charged him with violation of Sections 10(b) and 14(e) of the Exchange Act, and Rules 10b-5 and 14e-3 thereunder. The Complaint alleged that Santana illegally traded in a number of securities on the basis of non-public information originating from Merrill Lynch and Business Week magazine, and charged him with violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Complaint alleged that Smith leaked confidential non-public information in connection with the Grand Jury Scheme and also invested money in connection with the Schemes, and charged him with violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
For further information, see Litigation Release No. 19327 (August 5, 2005), Litigation Release No. 19340 (August 19, 2005), Litigation Release No. 19374 (September 14, 2005), Litigation Release No. 19775 (July 26, 2006), Litigation Release No. 19696 (May 11, 2006), Litigation Release No. 19650 (April 11, 2006), Litigation Release No. 19966 (January 12, 2007).