FOR a retired Croatian seamstress, Sonja Anticevic was astonishingly good at playing the stock market, writes Dominic Rushe in New York. The 63-year-old had supplemented her 1,600 kuna (€219) pension with cleaning jobs, but last August she made a $2m (€1.65m) profit by trading options in Reebok International, the sportswear firm.

The canny cleaner was one of a number of people in Croatia, Germany and America to buy into Reebok days ahead of its takeover by rival Adidas.

But their winning streak came to an abrupt end after the American authorities had their accounts frozen and launched an investigation into suspicious trading in the firms’ shares.

Last week the authorities claimed to have solved the mystery of the smelly trainer trades when they arrested staff at two of the world’s top banks. They said it was one of the most extraordinary insider-dealing scams of all time.

As well as high-flying bankers and Croatian cleaners, the scam involved drivers from Wisconsin, an exotic dancer from New York and even a film script written by one of the alleged perpetrators that spookily parallels the charges against them.

“This is one of the most brazen and pervasive insider-trading cases we have ever seen,” said David Markowitz at the New York office of the Securities and Exchange Commission (SEC). In court papers the SEC and FBI claim that Anticevic’s nephew, David Pajcin, a 29-year-old former Goldman Sachs bond research analyst, was the person really responsible for her sudden fortune.

The authorities claim Pajcin and fellow Goldman Sachs employee Eugene Plotkin, 26, made more than $6.7m after conspiring with Stanislav Shpigelman, an analyst in Merrill Lynch’s mergers and acquisitions department, on a series of insider trades.

Shpigelman, a friend of Plotkin’s from college, was introduced to Pajcin in November 2004 at a Russian bathhouse in lower Manhattan called Spa 88.

The authorities claim that the 23-year-old banker agreed to pass on advance information about deals that Merrill was working on in return for a percentage of any profits made by trading on the information.

The trio traded illegally in at least 25 stocks in one year and tipped off several individuals in America and Europe in return for a share of their profits, claim the authorities.

Monika Vujovic, 23, an exotic dancer from New York, was among those named. She, like Anticevic, allegedly had an involved forklift-truck account set up in her name by the defendants.

Shpigelman and Plotkin were suspended from their jobs last week and spent the weekend in jail. Bail has been set at $3m each. Pajcin was arrested and released on bail in November last year. He is co-operating with the authorities.

Markowitz said insider trading had long been a problem on Wall Street but this case showed a much higher level of premeditation than most. “This was a real caper. They really thought through what they were doing,” he said.

The defendants are alleged to have netted $6.7m trading on their knowledge of deals that had not yet been announced to the market. Their biggest pay-day was the sportswear deal, but in 2005 the trio also profited from early information on deals including Procter & Gamble’s purchase of Gillette, Novartis’s acquisition of Eon Labs and the Cinergy and Duke Energy merger, according to the complaint. Adidas, Procter & Gamble, Eon and Cinergy are all Merrill clients. In another scheme the three are also charged with making $345,000 from early access to Business Week’s Inside Wall Street stock-tipping column.

The men went to great lengths to find people to steal advance copies of Business Week, targeting employees at the plant with online job ads, according to the SEC. They also convinced a New Jersey man to move more than 1,000 miles to Wisconsin, where he was hired at the magazine’s printing plant.

Forklift-truck drivers Juan Renteria, 20, of Milwaukee, and Nickolaus Shuster, 24, now of Lexington, Tennessee, stole magazines and gave Plotkin and Pajcin the names of stocks mentioned in the column.

This is not the first time people have tried to profit from early access to Business Week. Last year a former postman agreed to pay $580,000 to settle SEC charges that he made $154,000 in illicit profits trading on early information from Business Week.

In 2003, two former employees at the same Wisconsin plant pleaded guilty to violating securities laws by giving out sneak previews of the magazine in exchange for nearly $18,000 in cash. And in 2002, two New York brokers settled SEC charges that they paid cash for advance copies that were obtained from a foreman at a Business Week distribution facility in New Jersey.

The Business Week scam was ingenious if unoriginal but before Pajcin and Plotkin were caught, the authorities believe they were working on a far more novel scheme for extracting sensitive information. They planned to hire exotic dancers to get inside information from investment bankers.

Plotkin and Pajcin, and other co-conspirators not identified in the court papers, also tried to help others get jobs at investment banks in the hope that they could get even more insider tips, said prosecutors.

None of the accused was available for comment, but Plotkin’s lawyer, Martin Schuckler, said the case against his client was in its preliminary stages. “The government has made a lot of claims and we have yet to see the evidence to substantiate those claims,” he said.