Feds file charges on insider trading scam using BusinessWeek info
Federal authorities have filed charges against a Merrill Lynch analyst and two Lehman Brothers employees who developed an elaborate insider trading scam that involved using en employee at the printing plant where BusinessWeek is printed every week to get inside information, MarketWatch is reporting.
Marketwatch reports, “Authorities also charged Juan Renteria, 20, an employee of Quad Graphics printing plant in Hartford, Wis., and said he was hired by the team to get a job at the plant in order to obtain advance copies of BusinessWeek’s “Inside Wall Street” column. Plotkin and Pajcin allegedly persuaded Shpigelman to provide tips on coming mergers in return for a share of the trading profits.”
The “Inside Wall Street” column is written by Gene Marcial, and it has been the subject of other insider trading scams.
In 2003, workers at the same Wisconsin printing plant were involved in another insider trading scam involving BusinessWeek and the “Inside Wall Street” column, according to this Milwaukee Journal-Sentinel article.
In 1989, Seymour Ruderman, an editor at BusinessWeek, was sentenced to six months in prison for trading on information in the magazine before it was published. He had earned $39,000 in profits with the information. The SEC also brought charges against the editor. The information came from the â€œInside Wall Streetâ€? column written by Marcial, whose reporting of tips in the piece has been criticized in the past because they often come from Wall Street analysts and investors who could potentially profit from what he writes.
In 1989, a former salesman for the printer of Business Week admitted in court to inside trading based on the magazine’s stock column and agreed to pay more than $31,000 to investors who may have lost money as a result.
In 1990, two California men settled charges with the Securities and Exchange Commission that they traded on inside information obtained from advance copies of BusinessWeek magazine, again seeking information from the “Inside Wall Street” column.
Read the MarketWatch story here.