A federal judge has ordered a retired Croatian seamstress to pay more than $5.7 million for her role in an insider trading ring involving two former Goldman Sachs Group Inc employees.
US District Judge Kimba Wood directed the seamstress, Sonja Anticevic, to give up $2.63 million of ill-gotten profits and interest, and pay a $3.08 million fine, in an order filed on Monday in Manhattan federal court.
Wood granted the US Securities and Exchange Commission's motion for a default judgment. The civil fine equals 1-1/2 times Anticevic's estimated ill-gotten gains, which totaled nearly $2.06 million. The SEC had sought a treble fine.
The case first surfaced in 2005, and is one of the more unusual insider trading cases in recent years.
It included accusations that Anticevic, who was 63 at the time, held two brokerage accounts in her name that were used for illegal insider trades.
Prosecutors previously obtained guilty pleas from former Goldman broker David Pajcin, who is Anticevic's nephew, and his colleague Eugene Plotkin for their roles in obtaining $6.7 million of illegal profits.
Investigators said the ring traded on tips about pending mergers, including Adidas AG's purchase of shoemaking rival Reebok International Ltd, and the progress of a grand jury probe concerning drugmaker Bristol-Myers Squibb Co.
Tippers included a former Merrill Lynch & Co employee and a New Jersey postal worker who served on the grand jury, both of whom also pleaded guilty to criminal charges.
The SEC expects to recover at least much of Anticevic's illegal profits.
“The most significant point is that a large portion of the money has been frozen, so while it is often hard to collect against a foreign defendant, we expect to be able to,” said Scott Black, a senior SEC lawyer who has been handling the case, in an interview.
According to court records, Jonathan Kaye withdrew in July as Antecevic's lawyer, and no one has replaced him.
Kaye told Reuters he had held discussions with the government that could have resulted in a settlement that did not include a fine. But he was not able to find his client and secure her consent for a deal.
“All my efforts to contact her in Croatia all went without any reply whatsoever,” Kaye said.
Asked if the judge's order was enforceable, Kaye said: “I would have no idea. I'm sure the government knows lots of things I don't know.”
Anticevic could not immediately be located.
Pajcin is believed to have fled the country, Black said.
Neither Pajcin nor his lawyer could immediately be located.
The SEC in July moved for a judgment under which Pajcin would pay more than $27.7 million representing fines, ill-gotten gains and interest. (Reuters)