Sonja Anticevic, a Croatian in her sixties, was accused of holding two broker accounts which she allowed her nephew to use for illegal transactions.
David Pajcin, her family member and former Goldman Sachs Group trader, was one of a number of men sent to jail for his part in an insider trading ring which is thought to have made $6.7 million in illicit profits during 2004 and 2005.
A $5.7 million default judgement was successfully filed against Ms Anticevic by the SEC in November last year after the regulator claimed that the retiree had failed to respond to a court order earlier in the year.
However, her response was incorrectly addressed to the court, which led to the default judgement being made.
In an address to the Kimba Wood, US judge, who was quoted by Bloomberg, said: âAnticevic made a good faith effort to respond to the courtâs July 2009 order.â
âFurther, the court notes that Anticevic is a foreigner and likely not familiar with the US legal system and court procedures.â
Mr Pajcin is believed to have traded using tips provided by an investment analyst at Merrill Lynch.
By Jim Ottewill