Aug. 28 (Bloomberg) -- A former Goldman Sachs Group Inc. associate pleaded guilty to making more than $6.7 million by engaging in an insider trading scheme, reversing his initial claim of innocence.

Eugene Plotkin, 28, who worked in the bank's fixed-income research division, pleaded to one count of conspiracy and eight of insider trading in a scheme that involved secret information about pending Merrill Lynch & Co deals, magazine stock tips and an exotic dancer.

The crimes carry a maximum penalty of 165 years in prison, Assistant U.S. Attorney Helen Cantwell said in court. Under the terms of a plea agreement with the government, Plotkin would face five years and 11 months when he's sentenced Nov. 30, she said. Plotkin also agreed to forfeit $6.7 million that he and his co- conspirators earned in the scheme.

``I understand what I did was wrong and against the law,'' Plotkin, a Harvard University graduate, told U.S. Magistrate Judge Debra Freeman today in federal court in New York.

Freeman asked Plotkin: ``Was it your intent to perpetrate a fraud upon the investing public?''

``Yes, and I'm deeply sorry for it,'' Plotkin said.

U.S. prosecutors have stepped up efforts to crack down on insider trading. A prosecutor said a former Morgan Stanley finance vice president and her husband are expected to plead guilty to insider-trading charges next month.

Insider Trading

In May ex-Morgan Stanley compliance officer Randi Collotta and her husband pleaded guilty to insider-trading charges in an unrelated case. A hedge fund trader last month became the seventh person to admit guilt in a separate case against employees at Zurich-based UBS and New York-based Morgan Stanley and Bear Stearns Cos.

Plotkin is the fifth person to plead guilty in a case involving three schemes.

U.S. Attorney Michael Garcia charged Plotkin and former Goldman analyst David Pajcin with illegally trading on secret information about pending deals that they got from Stanislav Shpigelman, a mergers and acquisitions analyst at Merrill. Pajcin, 30, has pleaded guilty, Garcia said in a statement today. His office wouldn't say when or to what charges he pleaded.

Adidas Deal

Shpigelman, 24, pleaded guilty and in January was sentenced to 37 months in prison for leaking secret information to Plotkin and Pajcin on Adidas-Salomon AG's $3.67 billion purchase of Reebok International. He was originally charged with leaking word on six pending transactions in 2004 and 2005, including Procter & Gamble Co.'s $61 billion purchase of Gillette Co.

Plotkin told Freeman today that he attended meetings as part of the crime ``starting around September 2004 through November 2005,'' and agreed to help his co-conspirators ``in a scheme to obtain inside information.''

Plotkin's attorney, Edward Little of Hughes Hubbard & Reed, said after court in a telephone interview: ``He's decided to accept responsibility.''

Goldman spokesman Michael DuVally declined to comment.

Merrill is a passive, minority investor in Bloomberg LP, the parent company of Bloomberg News.

Plotkin and Pajcin were also charged with illegally obtaining names of stocks touted in Business Week's ``Inside Wall Street'' column before the magazine shipped from the printer.

A worker at the Wisconsin printing plant, Nickolaus Shuster, pleaded guilty top the scheme in October, admitting he tipped Plotkin and Pajcin to the names of companies about to appear in the magazine. He hasn't been sentenced yet. Juan Renteria, 21, another printer employee, was also charged. His case is pending, Cantwell said after the court hearing.

Grand Juror

In a third scheme, a New Jersey mailman, Jason Smith, admitted in December that he leaked secret information to Plotkin and Pajcin from a grand jury on which he was serving. Smith was sentenced in December to 33 months.

The M&A trading scheme involved several ``tippees'' who made the trades and shared profits with Plotkin and Pajcin. They included Plotkin's father, Mikhail, and Pajcin's aunt, Sonja Anticevic, a retired seamstress in Croatia, the U.S. Securities and Exchange Commission alleged in a separate civil complaint.

It was a trade linked to Anticevic that initially alerted authorities to the scheme. Two days before Adidas-Salomon announced its purchase of Reebok, a $130,000 purchase of 2,000 options to buy Reebok shares was run through her account. After the stock price rose more than 30 percent, the options in Anticevic's account were sold for a profit of $2 million. Pajcin controlled the account, the government said.

Exotic Dancer

Another tippee was Monika Vujovic, an exotic dancer in New York who allowed Plotkin and Pajcin to use an account in her name to make trades. According to the SEC, they met Vujovic in a ``gentleman's club.''

In 2003, Plotkin shot ``One Way,'' a feature-length independent film he wrote, produced, directed and starred in, playing a junior finance employee framed for stealing millions of dollars from a client and for murder.

``I had a dream job, a beautiful girlfriend, money, social access,'' says Plotkin's character says to a drug dealer, according to the script. ``Every door in the world was open to me. Look at me now! I'm on the run from the law.''

Pajcin played the drug dealer.

The case is U.S. v. Plotkin, 06-CR-389, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Patricia Hurtado in the federal courthouse in New York at pathurtado@bloomberg.net; Lindsay Fortado in New York at lfortado@bloomberg.net.

Last Updated: August 28, 2007 16:12 EDT