WASHINGTON/NEW YORK -- The FBI has arrested a former stockbroker and accused him of insider trading using stolen advance copies of Business Week magazine, according to a court complaint released yesterday.
David Pajcin, the ex-broker, was named in August in a separate civil case brought by securities regulators for his role in alleged trading misconduct and phony identities involving Reebok International options.
The latest complaint against Pajcin was filed in US District Court in Manhattan. It accused him of obtaining advance access to Business Week's Inside Wall Street column and buying 10 separate stocks ahead of the column's publication.
Pajcin allegedly told a cooperating witness in the case that someone at a Business Week printing plant in the Milwaukee area ''was providing him with the publication prior to its release to newsstands."
The court complaint alleged Pajcin bought securities in TheStreet.com, BioLase Technology, Curis Inc., Sipex Corp., and Alltel Corp. These stocks and five others received positive comments in the magazine column, which was published after markets closed on the same days Pajcin bought the shares, the complaint said.
Pajcin's purchases ranged in size from 3,500 to 21,000 shares and occurred between Nov. 18, 2004, and March 3, 2005, the complaint said. The other five stocks were Cornell Corrections, Spectrum Pharmaceuticals, Arbitron Inc., Imax Corp., and Impax Laboratories, it said.
Earlier, on Aug. 18, the Securities and Exchange Commission named Pajcin as one of eight additional defendants in a civil lawsuit brought in the same court in Manhattan. The SEC lawsuit alleged insider trading in Reebok share options through a network of personal and online connections stretching from Croatia and Germany to New York and London.