Seamstress in SEC Insider Case Wins Judge’s Ruling

A retired Croatian seamstress won a ruling from a federal judge in New York reversing a $5.7 million judgment against her in a 2005 insider trading lawsuit.

A lawyer for Sonja Anticevic, 63, persuaded U.S. District Judge Kimba Wood in New York to vacate the judgment. Anticevic is the aunt of David Pajcin, one of the ringleaders of a wide-ranging insider-trading plot that operated from mid-2004 to mid-2005. Pajcin, a former Goldman Sachs Group Inc. analyst, went to prison as one of a half-dozen defendants who pleaded guilty in a criminal case. In a related civil suit, the SEC claimed Anticevic gave Pajcin permission to execute trades through her account.

Wood said in a May 14 ruling that she received a letter from Anticevic’s Croatian lawyer on March 30 explaining why the retired seamstress had failed to respond to the lawsuit after the judge ordered her to do so last year. That failure prompted Wood to enter a default judgment against Anticevic.

“Anticevic made a good faith effort to respond to the court’s July 2009 order,” Wood wrote, explaining that Anticevic’s 2009 response was returned to her because it was improperly addressed. “Further, the court notes that Anticevic is a foreigner and likely not familiar with the U.S. legal system and court procedures.”

Sauna Meeting

Pajcin, of Clifton, New Jersey, and Eugene Plotkin, a former colleague, traded on tips from Stanislav Shpigelman, a former merger analyst at Merrill Lynch & Co., whom they recruited in a 2004 meeting at a lower Manhattan sauna. A New Jersey mailman also leaked them news from a grand jury on which he was serving, and two workers at a Wisconsin printing plant told them the names of companies about to appear in Business Week magazine.

One of Anticevic’s lawyers in Croatia, Josib Cigic, said in an interview today that they will prove Anticevic’s innocence “through a Croatian court.”

“She will respond but in Croatia,” he said, adding that the U.S. court will ask the Croatian court to hear the case.

In her May 14 ruling, Wood ordered Anticevic to file a response to the U.S. lawsuit in New York by July 21.

Pajcin began cooperating with U.S. investigators soon after they opened a probe in 2005. In November 2008, Pajcin, who has family in Croatia, was found in violation of his probation after serving two years in prison for failing to report to authorities.

Pajcin’s lawyer, Jesse Siegel, said in an interview today that he hasn’t heard from Pajcin, who may have left the U.S.

John Heine, a spokesman for the SEC, declined to comment.

The case is SEC v. Pajcin, 05-cv-6991, U.S. District Court, Southern District of New York (Manhattan).

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