Trading

Trade has been prevalent in history since the first civilizations. Trade became popular and evolved into elaborate systems that extend long distances. The silk road was a 4,000 mile long trade route that lasted from 130 BCE to 1324 CE. The silk road is responsible for the spread of religion, goods and disease. The silk road was in transit for almost 2,000 years.

During this time many things were traded from Asia to Europe. One of the main religions that spread because of the silk road was Buddhism, as it spread it eventually reached China. Buddhist monks traveled, teaching their religions to people at different trading places on the route from India to Central Asia and China. People began worshiping Buddhist Gods and considered themselves bodhisattvas. Many years after the silk road began, Christianity became apparent from East to Central Asia and further to China.

The silk road helped religious diversity and introduced many religions to civilizations all along Asia to Europe. The silk road’s main purpose was for trading goods, silk was a major good because having silk showed wealth and status. The Chinese exported silk, they were given the name ‘land of silk’ by the Romans. China also exported teas, salt, sugar, porcelain, and spices. Central and East Asia and East Mediterranean exported woolen goods, carpets, curtains, blankets and rugs. China was unaware of these types of goods and were willing to send their silk for these goods. Military equipment, gold and silver, gemstones, glass items and camels were also traded by Central Asia. Other traded products were animal skins, wool, cotton fabrics, gold embroidery, fruits like watermelons, melons and peaches.

All of these were traded and much more, all of these goods were what kept the silk road in transit. Not everything that was traded was always good. Fatal diseases traveled the silk road along with the goods people were introduced to illnesses that they had no immunity to. The silk road was responsible for the spread of smallpox and measles, the impact these disease had on both the Roman Empire and Eurasia lead to political collapse. Although these diseases devastated the population, they helped to grow the religions that were spread. The black death also traveled the silk road and took out more than ⅓ of Europe’s population. Aside from the wreckage these diseases caused, some good came from it. Tenant farmers and urban workers could ask for more pay because their services became in higher demand.

Although at the time of the destruction the diseases took out many people, strength has come out of it. People have created immunity to fight off horrible diseases like these. The silk road is responsible for the spread of religion, goods and disease. The interaction of people from Asia to Europe was very important; the different religions that spread is still used today, silk would be foreign if China did not export it, and the diseases helped build an immunity that people still benefit from today.

Trade routes remained as the foundation of many empires and in many cases, they influenced their rise and decline. For example, during the time period from 700 CE-1500 CE, three powerful Sudanic states rose in Western Africa in the order of Ghana, Mali, and Songhai. These empires lived extremely wealthy as they dominated important gold deposits in which Muslim merchants traded for salt, copper, clothes, and other daily necessities. In fact, at their glorious eras, the king of Mali, Mansa Musa, went on a hajj to Mecca in 1324, and during his journey, he handed away a large sum of gold as gifts that their prices could not recover in the next few years.

Throughout the time period from 600 CE-1450 CE, the development of the Eurasian Silk Road and Indian Ocean Sea Route had more differences than similarities. Both trade routes aided the spread of major religions including Buddhism and Islam. However, the locations of these routes offered very diverse transportation methods as the Silk Road utilized domesticated animals and caravans while the Indian Ocean Route, in contrast, sailed on ships through their significant, periodically monsoons. New innovations gradually appeared, in which through the Silk Road, technologies of printing and gunpowder spread across to the west, while new ship designs and navigational instruments were often detected in the Indian Ocean region.

Religions flourished as new conversions emerged along the Silk Road and Indian Ocean Route collectively. For instance, Buddhism reached China during the downfall of the Han Dynasty by the missionaries works of monks, wandering on the Silk Road. By that time, the citizens had begun to waver from traditional Confucianism beliefs and favored the new religion.

However, the rise of the Tang and Song Dynasty halted the further growth of Buddhism as Confucian bureaucrats resented their reputation. Even though Tang officials ordered the burning of Buddhist monasteries, and forced monks and nuns back to secular life, the religion never faded away as they intertwined with Chinese cultures. Peasants popularized Buddhism, and it gradually fused with both Confucianism philosophy and Daoism beliefs, creating Neo-Confucianism in the Song Dynasty. The Silk Road, similarly, urged the spread of Christianity as the other half of this trade was linked to the Roman Empire. The constant nomadic invasions and bureaucracy corruption during their decline led to the final collapse of Imperial Rome, but their successor, Byzantium, continued to abide by their religion which was Christianity.

Even though Rome failed, Byzantium remained as a new place of commerce, thus their beliefs passed along the Silk Road all the way from the Mediterranean region to Eastern Asia. At this time, in the Indian Ocean Route, Islam stood as one of the core religion in which many people supported. This was a result as the Islamic Empire controlled the Delhi Sultanate in the post-classical period. Though there were contrary differences between Hinduism, the lower castes, untouchables, and slaves welcomed Islam as they heavily stressed equality upon Allah.

The term ‘Silk Road’ was first used by the German geographer Ferdinand von Richthofen for the route through which the Roman used to buy the Chinese silk with their coins. In earlier days the main variables of the ‘Silk Road’ was thought to be silk and coins; later it was realized by the historians that there was enough evidence which showed the probability that the paper was actually one of the main variables and not the coins. On the basis of under what conditions the given source was produced, the evidence of archaeology can be classified into two subcategories: intentional sources and non- intentional sources.

Intentional sources here mean the sources produced by the historians with the intent of being preserved for the future (for example chronicle) and non-intentional sources are the sources that were made without any intention of historying. Both the sources have helped us in having a good understanding of why the ‘Silk Road’ existed in a particular time in the history.

While digging through history we find that the most have been written about the silk by the classical writer Pliny the Elder. In his writing we can clearly see him providing a different description of the silk in different places: for certain places, he describes silk as a product obtained from silkworms while in other places he calls them as a plant’s byproduct. He had the negative opinions for the Roman trading silk and other luxurious items with the Chinese: he thought Romans were wrong in using a lot of their money to buy silk especially because it was a transparent thing.

In contrary to this very opinion, there exist a couple of problems: the first one being that the Roman government did not collect the kind of trade statistic that would have proved Pliny’s allegations correct; in similar way the second problem is that if the Pliny’s opinion was right, there had to be a lot of Roman coins in China which in fact historians haven’t been able to and the third one being that even though Chinese were first to use silk there were a lot of other places that were manufacturing silk very early so, there exists a probability that the silks that Pliny was complaining about were from other places rather than being from China. These all of the problems provide us a strong reason to believe that there had to be another major purpose of the ‘Silk Road’ rather than just being for the trade of Chinese Silk between Roman and Chinese.

The ‘Silk Road’ history can be divided into 4 major stages: Before and after the Common Era (Xuan Quan), 3rd and 4th centuries (Niya, Loulan, Sogdian Letters), 6th through 8th centuries (Turfan, Mount Mugh), Moshchevaia Balka (north of the Caspian sea) and 9th and 10th centuries (Dunhuang). At Xuan Quan, the archaeologist has been able to find a lot of evidence of writing material even before the paper came into existence. Many of these documents Xuanquan documents have recorded the movement of envoys— from Samarkand and Kushan Empire—but not merchants. And some of them had private horses mentioned on it which suggested that the primary purpose of the people traveling in the route might not be traded, however, some of them might be engaged at it.

Coming to the Second Stage, 3rd and 4th centuries (Niya, Loulan, Sogdian Letters), the kharosthi documents found at Niya had one use of the word ‘merchant’ which also suggest the same thing as earlier one. Some of these talks about the residents exchanging animals, rugs, and grain for livestock (cattle, horses, camels). Some of them have been written about the use of grain to make purchases and making use of pomegranates, cloth, grain, cattle, ghee, sacks, baskets, sheep, and wine to pay taxes. Similarly, evidence found by the archaeologist at Niya suggests that the most of the people making use of gold and silver coins or gold jewelry or bolts of silk were primarily emissaries from the king. Some of the documents talk about the silk, especially plain weave silk, functioned as the money form the 3rd to the 10th centuries. Silk was an alternative to coins. They used silk or coins to buy other items.

The third phase, 6th through 8th centuries (Turfan, Mount Mugh), Moshchevaia Balka (north of the Caspian sea), can be considered as a high point of the ‘Silk Road’ trade. Because the temperature at the Turfan is very high a lot of evidence is found to be preserved there. The paper clothings such as the paper hat, paper shoes, which were put upon the dead at the graveyard of the Turfan is a perfect example of the non-intentional sources. As a matter of fact that the recycled paper is cheaper than most of the material which can be used to make clothing,the paper clothing found at the graveyard were all made from the recycled paper with writing on it.

Some of the tombs contained the contract of money lending with it; it was so done because there is a belief in China that the contract that is not fulfilled in certain life will be carried into the next life by the person in doing so, so gets an opportunity to fulfill them in next life. The hands of the figurine that were found at Turfan had her arms made of recycled papers. When archaeologist dismantled such figurines they found the document containing records of loan transactions: the amount given as a loan, the name of person taking the loan, the dates, their age, and address, paid amount and remaining amount and crossed sign if the person was fully redeemed from the loan were found to be recorded.

One of the Chinese historians made a good study of the addresses recorded and figured out that all the people taking loan actually took the loan from the Chinese capital rather than from Turfan. With this evidence, we can clearly tell that the paper was the most preferred writing material and it was widespread in various places. If we read Turfan document we can see that in between 273-580s, local people used rugs, grain, and silk as money; in between 580s-700, local people used silver coins, primarily Sasanian or copies and after 700, local people shifted to Chinese coins.

The fourth phase, 9th and 10th centuries (Dunhuang), has the largest number of evidence sources: at least 40,000 documents were found in Dunhuang cave, 20,000 in Chinese and 20,000 in Tibetan. One of the most important documents found of the ‘Silk Road’ is about the shipment of silk that the central government sent to the region lying 700 km east of Dunhuang. This document has clearly shown the Tang government collecting taxes in silk. The textiles that were used in this phase was silks and cotton. In late 700s there was a complete disappearance of coins and grain or cloth in fixed measurements were used as it’s replacement.

Even though the coins got completely disappeared, the use of paper was so widespread that it kept continuing. One particular document found at the Dunhuang records the sales of a peddler merchant. The sales start with 100 pieces of white and 19 of red wool raghzai cloth. He travels a triangle near Dunhuang to trade 3 pieces of undyed cloth for 2 dyed or 4 dyed pieces for a sheep. This record gives us the insight into how the economy worked in this phase even when there were no coins.

With all of these handfuls of archaeological evidence, it is most likely that the earlier idea about the Coins and Silk being the main variables of the ‘Silk Road’ was wrong; the main variables of the ‘Silk Road’ had to be the Paper and Silk. The ‘Silk Road’ had a lot of different kind of people traveling in it merchants, emissaries, missionaries, artist all of them traveled in the ‘Silk Road’ some of them traded in some of the times but it was not their primary purpose of traveling. The real significance of the ‘Silk Road’ [From the Chinese point of view] is that it was the first time that they learned about another society and really systematically learned about India because a lot of Chinese people were interested at Buddhism.

The African-Eurasian trade routes, including the silk road, the trans-saharan route, and the Indian Ocean routes, These were the most well known as most effective ways of mass production through 500 to 1500 CE.The routes became a big source of different economies, this introduced foreign goods and trade throughout the world. It was much easier to transport mass materials over a long distance in a short p of time. The routes were over both water and land spreading vast goods from India to North Africa and its east coast. There was also a large economic trade boom with China joining in on the action.

With trade becoming a big source of each country’s economy everyone wanted in. There became a surge for luxury items such as china’s mass production of silk and other beautiful clothing items. China became a big competitor wanting new items such is ivory and north African gold. The crave for new foreign materials that would make you stand out or show your power to the People around you was what drove trade to were it was. During this vast trade market there was now a much easier way to obtain building materials with wood becoming a big part of trade. With new materials coming into port all the time you could build better homes and start to improve the structures in your community.

China was becoming a trading powerhouse and trading with variety of people around the world. They started to mass produce new items for trade goods not available in different areas. Their silk and food trade brought wealth and efficient transportation of goods. They also were very key in utilizing “Trade Winds” to get back and forth from country to country. They would use the winds during certain months to get to their destination as fast as possible. The bigger sails on their ships would also help catch the wind, There was also a new invention of a keel on the bottom of the boat and a ruder making it easier to steer the ships. China also introduced many new ideas and religions the different regions such as buddhism.

The Silk road trade routes were also another instrumental key for trading new and foreign materials across europe. There were many different items being traded along the silk road. It ranged from luxury goods such as gold, silver ivory and gems. It also helped move food along the routes helped smaller communities purchase food and fight possible famines.

The northern caravan route brought many goods to china such as dates, saffron powder. It also helped exchange glass from Egypt, pistachio nuts from persia and Sandalwood from india. The Silk road was instrumental in spreading a variety of things over a vast area in a short period of time. This helped spread new ideas around the world and help others grow and see others cultures from a new point of perspective.

Trade routes were instrumental in today’s daily life showing us how much trade can benefit economies. Countries now know people will spend an excess of money on foreign objects they cant get everyday. This time was very big for trade and showed what vitalizing shipments over sea can do. These routes were all about making the travel more efficient and carrying more and more each time.

The key time of growth and importance for the silk road was from 500-1500 C.E. The silk road was important for reasons like spreading culture and being the first of many routes of trade, inspiring many to come like the sand and sea routes, and more — but the most important things it brought to the period were the spread of religion, disease, and the formation of new cities.

Religion is one of the many things that was changed during the life of the silk roads. Buddhism in particular was majorly impacted by the silk roads. Buddhism was allowed to flourish and prosper largely due to the merchants. Many of these merchants favored the religion that of Hinduism. Buddhism appealed to these merchants because they did not like the ways of Hinduism as it was Brahmin dominated and held the caste system very highly in its roots. Buddhism’s universal message appealed greatly to the merchants who, while on their trade routes would spread the message of buddhism to anyone who would listen.

Many Indian traders and Buddhist Monks used the trans-European trade routes to bring the new religion to central asian cities such as Merv and Samarkand. By the first century many inhabitants of these towns and others surrounding them and all across Eurasia had converted to Buddhism. These large cities were allowed to freely convert to Buddhism without pressure from conquest or foreign rule. These new Buddhist cities were heavily reliant on long-distance trade and found a connection in the religion to larger more wealthy civilizations in India. These cities were also advanced by Buddhism. Traveling monks or merchants could gain religious prestige by building monasteries and supporting monks. These monasteries also provided a resting place for traveling monks and merchants to resupply and rest before traveling on.

Many of these cities became centers for learning and commerce. Buddhism progressed slowly outside of these cities. It was slow to catch on in pastoral societies due to the absence of a written language, but as the pastoral societies became more reliant on the silk road trade it grew and became more popular. This was the case in the nomadic Jie people who controlled much of China after the fall of the Han dynasty. The leader of these people came to know a buddhist monk and as their relationship grew, thousands converted and hundreds of temples were constructed. Buddhism itself was also changed by the silk roads. It changed from a more materialistic faith to being more focused on secular affairs. The beginning bowls became more of a symbol rather than a daily task.

Also the doctrines of Buddhism were altered in many ways. They were more devotional and focused on earning merit and emphasizing compassion. The religion also picked up many things from other cultures on the routes of trade. Including some of Alexander the great, and the mythological figure Herakles. The silk roads changed Buddhism greatly and in many ways. These changes can even be seen in modern day Buddhism.

The cities that surrounded the silk road were also heavily impacted during this time period. Many cities were impacted by the silk roads both in good and in bad ways. Many cities along the routes grew and became huge economic cosmopolitan centers of trade. The passing of goods, ideas, people, and knowledge created the perfect environment for cities like Merv and Khotan to grow and flourish.

Many cities were formed specifically because the silk road was close by, and those cities grew quickly. However, it also caused many cities and small societies to die out if they were too far from a trade route they were often overlooked and forgotten. Cities far from the road were often left alone to diminish and die off. The silk roads allowed for the growth and flourishing of many cities, and also the collapse of others, that heavily impacted the world and history.

The spread and impact of disease was also heavily impacted by the silk roads. Many big cities along the trade routes had become developed characteristic disease patterns, immunities for certain disease and ways of dealing with them. However when people from other cities came into contact with these diseases they were entirely unprepared to deal with them. Trade was a risky and dangerous profession during this time. Trade merchants had no way of knowing whether or not a city was disease free or a raging center for a deadly virus. Widespread diseases affected the Han Dynasty and the Roman Empire because the silk roads promoted trade all throughout Eurasia. Because of this, new diseases were easily spread around the continent.

Smallpox and measles spread rapidly through Rome and China, subsequently the rise of these deadly viruses allowed Christianity and Buddhism to grow in these countries both offered compassion in the midst of all the suffering. The Silk roads also played the key role in the spread of the bubonic plague as people with the disease sought help in nearby cities when taken ill on the route. The deadliest outbreak of a disease ever recorded happened between 1346 and 1350. The Black Death, causing Europe to lose one third of its population in such a short time.

However this did have some benefits as farmers and urban workers could demand higher wages and also hurt stately land-owning nobles as the price of their grain and crops dropped heavily. The silk roads was a passageway for death and disease during this time period and alloted for the death of millions of people all throughout Eurasia. This may not have been good to the population, but it was important for history.

The silk roads caused many things to change over time and also to stay the same and persist through our ever changing world. Religion, cities, and disease, were all heavily affected and changed by the silk roads. There were also many factors of those three things that stayed the same even through the time of change. Factually, the most heavily impacted thing seemed to be religion. Buddhism was so highly impacted by the silk roads and was allowed to flourish into the world’s seventh largest religion. Shi Le, the leader of the Han Dynasty was so impressed and agreed so heavily with the ways of Buddhism that he convinced thousands of people to convert to Buddhism and eventually almost an entire country. The silk roads were and are such a big part of our history and they impacted the lives of every single one of us, whether we know it or not.

Lafleur Trading Company Lafleur Trading Company was founded in 1975 and has been supplying fine foods and wines to countries all over the world (Apollo Group, 2009). The founders of Lafleur Trading Company believe their products meet the needs of consumers for their lifestyle, health, and ethics. Company leaders offer only products that have passed Canada’s strictest guidelines for organic products (Apollo Group, 2009).

The Lafleur Trading Company teams members stand by their company ethics, believe in the company mission, and stand by the values on which the company was founded. Organizational Analysis “Whether a firm is developing a new business or reformulating direction for an ongoing business, it must determine the basic goals and philosophies that will shape its strategic posture” (Pearce & Robinson, 2009, p. 25). To accomplish this effectively, the leaders of Lafleur must have clarity on the organization’s mission, vision, values, and goals.

These fundamental concepts serve as the foundation for why and how the organization will do business. Lafleur Trading Company has clearly identified the mission of the organization, which is providing high quality, organic products at competitive prices (Apollo Group, 2011). A company’s mission embodies the unique purpose it serves to meet and is developed with the values the leadership intends to infuse in the execution of its business.

At Lafleur, they are committed to a high quality product, which meets the needs of their customers in an ethical manner. The importance for any business to identify its mission is to describe the expectations it plans to meet on a daily basis, expressing the organizational attitude to all its stakeholders. The values the leadership holds dear, like seeking out the most reputable producers of products and certifying those products meet the highest standards, provides insight into the commitment of Lafleur’s leadership to their values and mission.

A vision, unlike the mission, is forward-thinking and identifies what the company’s leaders aspire for it to become. Lafleur Trading Company seeks to become the premier supplier of fine foods and wines in the world. This vision cannot be accomplished without clearly expressed goals. Its already impressive list of trading partners indicates the vision and goals for Lafleur was determined early in the organization’s conception. By continuing to make strategic decisions with the mission, vision, values, nd goals in mind, Lafleur is sure to attain a desirable future. Organizational Structure Lafleur Trading Company implemented a divisional organizational structure that allows the Chief Executive Officer to delegate responsibilities to separate department leaders. The decision to use a divisional organizational structure provides Lafleur Trading Company the ability to create departments that consists of experienced individuals in specific duties related to the department.

This method creates additional accountability for employees because the department manager delegates a task to an individual or team who is responsible for the competition of that task (Apollo Group, Inc, 2011). Creating individual departments also creates an environment where Lafleur Trading Company can focus on providing customers with quality products at the lowest price because employees in his or her departments focus on his or her assigned task without interruption form other unrelated tasks.

This structure allows Lafleur Trading Company to make decisions with better information and in less time because of the concentrated focus in each department. The divisional organizational structure at Lafleur Trading Company consists of four main positions the Chief Executive Officer (CEO), the Chief Information Officer (CIO), the Chief Financial Officer (CFO), and the Chief Operations Officer COO) (Apollo Group, Inc, 2011). The CEO oversees the total operation of the company using information from the CIO, CFO, and COO to determine what actions are appropriate.

The CIO is responsible for the information technology aspect of the company, and the CFO oversees the accounting and legal aspect of the company. The COO maintains the general operations of the business that consists of sales, purchasing, warehouse operations, and human resources. Each department manages the responsibilities assigned to them and reports to the CEO who can use the information to make decision with more information about each department involved (John A. Pearce, 2009). Collaboration Process

The collaboration process is a process in itself. It involves the process of parties coming together to work through the project. Each party should bring the project together; provide the scope of the project and the expectations. The parties need to understand and be clear on the success and the results of the project and then discuss the specifics. The framework offers the general components of collaboration. The elements include grounding, core foundation, outcomes, process and contextual factors.

Grounding is the foundation of collaboration in which the parties get together and share the idea. Core foundation is the mutual idea of the collaborative efforts. Outcomes are the efforts achieved by collaboration and process and contextual factors are what effect the each day actions of the collaboration. Once the process is complete and it has been implemented, the parties are on their way to getting results that they would have not got otherwise.

It is important to understand that the process is not for all situations and teamwork is the only way to achieve it. It is important to select the right people, for the right reason, and with the support of management. References Apollo Group, Inc. (2011). Lafleur Trading Company. Retrieved 12 8, 2011, from https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Lafleur/intranet. htm Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed. ). New York: McGraw-Hill.

Ethical Scandal Analysis of: David Pajcin and Eugene Plotkin Insider Trading Case Presented In Partial Fulfillments of the Course Requirements for FIN 4615 International Banking Prepared for: Marcos A. Kerbel Adjunct Professor Department of Finance Florida International University Miami, Florida Prepared by: David Kevin Vargas 2899406 (954) 443-4973 November 24, 2009 [pic] | |Academic Honesty Policy | |Individual Assignment Cover Page | |Submitted to: | |  | |  Prof. Marcos A. Kerbel | | | | |Submitted by: | |  | |  David Kevin Vargas | | | |Your Phone Number: | |  | |(954) 443-4973 | | | |Your e-mail: | |  | |  Dvarg013@fiu. du | | | |Date of Submission: | |  | |November 24, 2009 | | | |Title of Assignment: | |  | |  Ethical Scandal Analysis | | | |CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged| |and disclosed in the paper.

I have also cited any sources from which I used data, ideas or words; either quoted directly or paraphrased I also | |certify that this paper was prepared by me specifically for this course. | | | |Signature | |____________________________________________________ | Ethical Scandal Paper David Pajcin and Eugene Plotkin Case What is the case about? This case is about two men, who along with many friends and relatives, elaborated intricate insider trading schemes.

Their plans involved forklift operators at a Business Week printing plant, a mole at Merrill Lynch & Co. , a grand juror in a fraudulent accounting trial against Bristol-Myers Squibb, and several brokerage accounts in New York, California and Croatia. The duo and their friends would end up reaping profits of close to $7 million during the short time their operations were active. The group’s own mistakes and greed drove them overboard and the long-reaching arm of the law finally caught up with them ending their plans and ambitions. Who was involved? David Pajcin He was one of the masterminds behind the insider trading schemes. He was born in Clifton, N. J. o Croatian immigrants. He went to school in Jersey City and later attended Notre Dame University. He majored in economics and graduated cum laude. With an impressive academic history, Pajcin got a job at the commodities group at Goldman Sachs after he got out of university in 2000. However, he did not stay long. He left after five and a half months. Pajcin said he did not want to be stuck working on the trading floors like everyone else. He took a series of similar jobs in smaller firms in New York but he never stayed in one of them for more than a couple of months. Finally, in 2003, he stopped looking for jobs and started working for himself. Eugene Plotkin

He was the other half of the operation and close friend of David Pajcin. Born in Russia, Plotkin moved to California and lived outside San Francisco as a child. He then went to the California Institute of Technology but transferred to Harvard after one year. Plotkin studied economics there and graduated in 2000. He went on to Goldman Sachs where he started working as a fixed-income research analyst before being promoted to associate. That is where he met his future partner-in-crime (Pajcin) and where he stayed working at until his arrest in 2006. At that time he had a six figure salary in one of the most prestigious companies in Wall Street, a good place to be by anyone’s standards.

Stanislav Shpigelman A secondary character, Shpigelman was a 23 year-old University of New York graduate. He and Plotkin had met at a college recruiting drive where Goldman Sachs had sent Plotkin to. The two kept in touch and one day met at Spa 88 in New York where they struck a deal and started working together on an insider trading scheme. Shpigelman provided Pajcin and Plotkin with inside information about possible mergers and acquisitions his company, Merrill Lynch & Co. , was working on. The biggest tip he gave involved the acquisition of Reebok International by Germany’s Adidas, in which Pajcin and his group made $6 million. Sonja Anticevic

She is a retired underwear seamstress, who lives in Croatia, she also happens to be David Pajcin’s aunt. Anticevic came into the scheme when she let her nephew use an account under her name to make his trades. Monika Vujovic She was an exotic dancer who worked in New York’s finest gentlemen’s clubs; she was also David Pajcin’s girlfriend. She became involved by letting her boyfriend use her accounts to make investments. Vujovic additionally tried to help Pajcin by getting important information from investment bankers who she danced for. That scheme never worked though. Jason Smith He was an old high school friend of David Pajcin and worked as a U. S. postal worker in New Jersey.

Smith had been selected to be a part of a federal grand jury in Newark that was hearing a case about possible fraudulent accounting practices at Bristol-Myers Squibb. Pajcin got information from Smith about the possible outcomes of the case and started trading based on those tips. No profits were made from Smith’s information though. Nickolaus Shuster He was a 23 year-old New Jersey native whom David Pajcin recruited in New York to get information on stocks mentioned in Business Week’s column ‘Inside Wall Street’. He went to Wisconsin to get a job at the plant where the magazine was printed. Pajcin would pay him between $200 and $500 for each Business Week issue he stole. Juan Renteria Jr.

He was the second man to be hired to get information from the Business Week printing plant. Nickolaus Shuster was fired for unknown reasons so Renteria was sent to replace him in mid 2005. In total, Pajcin and his group made 48 trades and $280,000 in gains using the information received from the Wisconsin plant. Scott Black The S. E. C. senior trial counsel who interrogated David Pajcin about the trades he made and the connection between the Business Week articles and his decision to buy certain stocks. Black spent more than 8 hours talking with Pajcin before his arrest and uncovered damning information he would later use against Pajcin to convince him to cooperate with the authorities.

David Markowitz He was the Securities Exchange Commission (S. E. C. ) lawyer in charge of prosecuting David Pajcin and his accomplices. He led the investigation after the Market Surveillance Unit at the S. E. C. caught strange patterns and high volume of options trading the day before the Adidas-Reebok deal would hit the airwaves. When and where did it happen? The insider trading ring conducted their operations between the autumns of 2004 and 2005. In that short period of time Pajcin and Plotkin had devised about 4 schemes that would help them make huge profits in the short term. The main operations where done in New York where the two masterminds lived.

However the people involved could be found as close as California and as far as Croatia. Eugene Plotkin’s father (Mikhail Plotkin) who traded on inside information provided by his son was in California. The plant where Business Week was printed was in Wisconsin. The case from which Pajcin got tips from one of the jurors was being heard in New Jersey. The account Pajcin used to trade under his aunt’s name was in Croatia. It was definitely a widespread ring of participants. Pajcin and his partner also had other accounts opened in Austria, Denmark and Germany according to S. E. C complaints. Why did it happen? Both David Pajcin and Eugene Plotkin were very bright and had promising careers in Wall Street.

It was the temptation to make grand amounts of money that lured them into the wrong path. They thought they could deal on inside information and not be caught because they were using other people’s names to trade with. In the end their own greed is what called the attention of the government and what brought their operations down. The lack of supervision at the Wisconsin printing plant and at the brokerage companies where the accounts were opened also contributed to this scandal occurring. How can it have been avoided? The main driver for the actions taken by the masterminds was internal. Their will to become rich overnight pushed them into breaking the law.

Nobody could have curtailed their desire to make more money at all costs, but the steps they took to make their ill-gotten profits could have likely been spotted and taken care of before they started generating so much money. Having better surveillance at the printing plant where Business Week was being made would have forestalled Shuster and Renteria from stealing copies to later relay the information in them to Pajcin and Plotkin. Knowing that the stocks mentioned in the column ‘Inside Wall Street’ were usually moved by either a good or bad review from the column’s author should have led the managers of that plant to enforce higher levels of surveillance.

The brokerage firms where Pajcin and Plotkin had their accounts could have also been more meticulous about their surveillance. It was reported in July 2005 that a customer service representative from Ameritrade got a peculiar call asking to change the restrictions on an account. The account belonged to Monika Vujovic but it was David Pajcin on the other side of the line. The Ameritrade representative recalled there was something odd about that call but unfortunately the account in question went on without being investigated or much less frozen. The company should have at least taken steps to verify the identity of the true owner of the account after getting a call like that.

Other ways that might have prevented, or helped prevent, the large-scale insider trading frauds would have been detecting the leak of information from Merrill Lynch (through Stanislav Shpigelman) earlier as well as the leak coming from Jason Smith, the juror in the Bristol-Myers Squibb case. What was the outcome? After the initial S. E. C. complaints against Sonja Anticevic, it was soon clear that the authorities were going to go after David Pajcin. So he fled to the Dominican Republic immediately to avoid getting caught. But even though the S. E. C. did not have the authority to keep him from leaving the country, they did have the authority to freeze his bank accounts.

It was not long before Pajcin found himself in need of cash. The prosecutors sent Pajcin an e-mail where they told him the only way to get his money back was by going back to New York to give a deposition. The greed was strong enough in Pajcin to make him go back to the United States. Once there he was interrogated by Scott Black and later arrested for insider trading. He was quickly convinced to cooperate with the authorities to crack down on the remaining ring members. David Pajcin then started working with the S. E. C. to close all the gaps in the case. In the end six people were sentenced on January 2008. The men sentenced were; Jason Smith, Nickolaus Shuster, Juan Renteria Jr. Stanislav Shpigelman, Eugene Plotkin and David Pajcin. For sharing information about upcoming mergers, Shpigelman got 3 years in prison. For insider trading and conspiracy, Eugene Plotkin got 5 years in prison. Pajcin on the other hand, was sentenced to 2 years in prison because of his cooperation but was released the day of the sentencing because by 2008 he had already served 2 years while working with the S. E. C. Civil suits were presented against six other people who were involved in the scheme, including Monika Vujovic and Sonja Anticevic. The case looked closed until November 2008, when it was reported David Pajcin had violated the terms of his 3-year supervised release. Nobody knew where e was, it was presumed he was out of the country, but it was clear he was now going to face additional jail time for failing to report to his probation officer. What can be learned from it? Clearly the lessons from this scandal are the same everyone should have already known from past insider trading scandals. Even though the gains made by this group were not tremendously big, the law and regulators went after it with all the resources available to them. It should be noted that even the smartest and brightest graduates from the best schools in the country can be corrupt. Their careers, training and hard work was so easily thrown away because of a major lapse in judgment.

David Pajcin and Eugene Plotkin, as well as those who helped them, are clear examples of the effects of greed on young impressionable minds. ——————————— 0 ——————————— References Anderson, Jenny and Michael J. De La Merced. “An Insider-Trading Case With a B-Movie Plot. ” New York Times. 30 April 2006. 08 November 2009. Gimbel, Barney. “Partners in Crime. ” Fortune. 04 October 2006. 12 November 2009. Glovin, David. “Ex-Goldman Analyst May Have Fled After Cooperating. ” Bloomberg. 04 November 2008. 30 October 2009. “Where is Fugitive David Pajcin?. ” Securities Docket. 13 March 2009. 30 October 2009. “A Scam Exposed: Strippers and Insider Trading. ” American Greed. Video. CNBC, 2009.