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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, March 27, 2009

Three Defendants in Insider Trading Ring Settle Charges

On March 26, 2009, the United States District Court for the Southern District of New York entered final consent judgments against defendants Nickolaus Shuster, Juan C. Renteria, Jr. and Monika Vujovic, in an action filed in 2005 by the Commission, charging 17 defendants with collectively engaging in a insider trading scheme, which netted almost $7 million in illicit gains, through trading in at least 26 stocks.  The SEC alleged that Shuster and Renteria were hired by the two primary architects of the insider trading schemes, David Pajcin and Eugene Plotkin, to obtain jobs at Quad/Graphics, Inc., a printing plant for BusinessWeek magazine. Shuster and Renteria would call Pajcin and Plotkin, and read them key portions of the "Inside Wall Street" column — a widely-read column that generally moves the price of the securities of companies mentioned in it — prior to the time the column was made available to the public. As a result of the information provided, Pajcin and Plotkin traded in, and/or tipped others with material non-public information concerning at least 10 companies, resulting in collective ill-gotten gains of approximately $280,000. Pajcin and Plotkin paid Renteria approximately $5,000 and paid Shuster approximately $20,000 for the information. The Court entered orders permanently enjoining both Shuster and Renteria from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

As alleged by the SEC, Vujovic, who was dating Pajcin at the time, allowed Pajcin to open a brokerage account in her name at Ameritrade, Inc. and to engage in insider trading through that account in order to avoid detection. Pajcin executed trades from this account based on material non-public information he received stemming from BusinessWeek, as well as Merrill Lynch, collectively making over $314,000 in ill-gotten gains. The Court entered an order permanently enjoining Vujovic from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and further found Vujovic liable to pay disgorgement of $261,364.12, to be satisfied by payment of all funds in a brokerage account held in Vujovic's name at TD Ameritrade, Inc., which had been frozen since 2005 pursuant to a Court order.

http://lawprofessors.typepad.com/securities/2009/03/three-defendants-in-insider-trading-ring-settle-charges.html

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