Ex-Printing Plant Worker Pleads Guilty To Insider Trading

p> A former Wisconsin printing-plant employee pleaded guilty to insider-trading charges on Monday in connection with alleged improper trades in more than a dozen stocks based on pre-publication copies of BusinessWeek magazine's "Inside Wall Street" column.

Nickolaus Shuster, who worked at a printing plant in Hartford, Wisc., pleaded guilty to insider trading and conspiracy to commit insider trading.

At a hearing before U.S. Magistrate Judge Debra Freeman in Manhattan, Shuster admitted that he stole pre-publication copies of the magazine and then used a cellular phone to call in the names of companies mentioned favorably in the column to two co-conspirators. Those co-conspirators would then make improper trades in shares of those companies. He was obligated by his employer not to divulge details of what was in the magazine before it was available publicly, Shuster said.

"I knew what I was doing was wrong," Shuster said at the hearing.

Sentencing is set for Jan. 12. He faces up to 20 years in prison on the most serious charge of insider trading.

Prosecutors have alleged that Shuster and Juan Renteria, who also worked at the plant, were bribed by Eugene Plotkin and David Pajcin, two former Goldman Sachs Group Inc. (GS) employees, to divulge the names of companies favorably mentioned in the "Inside Wall Street" column prior to the magazine being available to the public.

Renteria and Plotkin have been charged criminally in the matter and are awaiting trial. Pajcin, who is facing criminal charges, is cooperating with the government.

The magazine, which is owned by McGraw-Hill Cos. (MHP), is made available to the public after 5 p.m. Eastern on Thursdays on its Web site and is available on newsstands on Fridays. Positive news about a company in the column can push that company's stock higher in trading on Fridays.

The government has alleged that the BusinessWeek scheme was part of a broader insider-trading ring orchestrated by Pajcin and Plotkin that netted more than $6 million in illicit profits.

Plotkin and Pajcin also have been accused of orchestrating two other insider-trading schemes in which they allegedly made trades based on insider information they received about pending mergers being handled by Merrill Lynch & Co. (MER) from a Merrill investment banking analyst, including improper trades prior to Adidas-Salomon AG's (ADX.XE) acquisition of Reebok International Ltd. last year.

The former analyst, Stanislav Shpigelman, has since pleaded guilty to criminal charges.