A young former Merrill Lynch analyst caught in a sprawling, $7-million insider trading scheme must serve more than three years in prison to show Wall Street that sharing valuable inside secrets will not be met with leniency, a judge said Friday.
U.S. District Judge Kenneth M. Karas said he was sending Stanislav Shpigelman, 24, of Brooklyn, N.Y., to prison because he did not want those entrusted with protecting secrets about stocks to think stellar academic and family backgrounds will protect them from punishment for financial crimes.
Shpigelman, 24, was the "brightest of the bright," one of a class of young, hardworking analysts employed by investment firms, Karas said.
He said it did not matter that Shpigelman made only $10,000 in the scheme and did not know that his tips were part of a large inside trading plot using leaked copies of BusinessWeek magazine, a corrupt grand juror and a plan for strippers to coax secrets from investment bankers.
Karas called Shpigelman the "essential component in the scheme" as he rejected pleas for even more leniency than the three to four years of prison called for by Shpigelman's deal with prosecutors, in which he pleaded guilty to conspiracy to commit insider trading.