America can't be only place with bent bankers

A ray of light comes, however, from a legal case I've been following in the US. Eugene Plotkin (crazy name, crazier guy when you find out what he got up to) has been sentenced to four years and nine months by a judge in Manhattan for insider dealing. Plotkin is 28, a Harvard graduate who liked to make his own films and take part in ballroom dancing. He was also a fixed income research analyst at Goldman.

His close friend at the bank was David Pajcin. Together they made a short film, alternately called One Way or Blindside, about a Wall Street banker who found his life turned upside down after he was wrongly accused of a crime.

In court papers, Edward JM Little, the lawyer for Plotkin, said Pajcin came into Plotkin's life when he was exhausted from putting in long hours and depressed at not having many friends. Pajcin was a "charming and good-looking man who was particularly effective with women, and he filled a void in Gene's life".

In the movie Plotkin and Pajcin shot, the banker was not guilty of the crime, but there was not much innocent about the plan they hatched. On 3 August 2005, Reebok announced it was being bought by Adidas, causing the Reebok share price to jump 30%. That afternoon, Mark Schonfeld, director of the Securities and Exchange Commission's New York office, received a call from the SEC's Office of Market Surveillance in Washington, alerting him to trades in Reebok shares prior to the announcement.

Schonfeld's colleagues traced the purchases to a 63-year-old seamstress in Croatia called Sonja Anticevic. She'd made over $2 million in just two days, realising a near 17-fold return on her outlay. She was, said Schonfeld, "either the most successful investor in the history of Wall Street, or part of something highly nefarious". They discovered she had a nephew - Pajcin.

He was trading in several accounts, including those of his aunt in Croatia and his girlfriend, a stripper. When they probed further, the investigators found that Pajcin and his pal, Plotkin, were meeting a Merrill Lynch mergers and acquisitions analyst, Stanislav Shpigelman, at steam rooms in Russian bath houses in Manhattan. Shpigelman was tipping them off about forthcoming bids, in return for a share of the proceeds.

It didn't stop there. Plotkin and Pajcin placed adverts on the Craigslist website for two people to work for them. They helped them get jobs at the Business Week printing plant in Wisconsin and got them to leak advance copies of the magazine, including its influential Inside Wall Street column detailing forthcoming deals. They made trades themselves ahead of publication and tipped off others, including Plotkin's father.

There was more. They also obtained confidential information from a member of the grand jury hearing testimony on a case involving Bristol-Myers Squibb. When they were eventually caught, the duo were in the process of trying to find others at investment banks who could tip them off. Says Schonfeld: "They even contemplated using exotic dancers to obtain confidential information from investment banker clientele."

Little claimed that Pajcin, who had lost his job at Goldman and entered into a plea bargain, was the more influential. Plotkin said he put the team together while Pajcin came up with the ideas. "Plotkin was more like the HR department while Pajcin was the origination and execution guy."

Goldman, presumably, would not recognise the description. But while the saga is fascinating, it does raise a serious issue: are we really to believe instances such as this do not occur in London? Is it only New York bankers who behave corruptly?