International investment banking leaders Merrill Lynch and Goldman Sachs have been rocked by scandal as US authorities have arrested employees of both over a multi-million dollar insider trading affair.
Eugene Plotkin, a bond analyst at Goldman Sachs and Stanislav Shpigelman, a junior-level investment banker at Merrill Lynch have been arrested along with a printing plant worker, Michael Garcia, the US attorney for the southern district of New York has revealed.
The men are alleged to have passed information about pending mergers to profit from buying up shares before the deals became public. The illegal endeavors have been valued at $6.7 million.
According to the Financial Times, the merger tip offs included information about Procter & Gamble’s takeover of Gillette, Novartis’ purchase of Eon and the merger between Cinergy and Duke Energy.
Mr Plotkin faces a maximum penalty of 70 years in prison; Mr Shpigelman could get up to 55 years, CNN has reported.