Ex-stockbroker pleads guilty in napkin-eating insider trading schemePosted On: Sep. 16, 2015 12:00 AM CST
(Reuters) — A former Morgan Stanley stockbroker pleaded guilty on Wednesday to insider trading, over a scheme in which an accomplice showed him stolen stock tips on napkins and Post-its in Grand Central Station and then ate the evidence.
Vladimir Eydelman, 43, admitted to securities fraud, tender offer fraud and conspiracy charges before U.S. District Judge Michael Shipp in Trenton, New Jersey, federal prosecutors said.
Mr. Eydelman, who until recently lived in Colts Neck, New Jersey, was accused of trading for himself, family and customers on tips about mergers and other corporate transactions stolen from Simpson Thacher & Bartlett L.L.P., a major New York law firm.
Frank Tamayo, a Brooklyn, New York mortgage broker, and Steven Metro, a former Simpson Thacher managing clerk, were also charged over the alleged $5.6 million, five-year scheme.
Mr. Tamayo, 42, pleaded guilty last September, while Mr. Metro, 41, pleaded not guilty and faces a Feb. 8, 2016 trial.
Walter Timpone, a lawyer for Mr. Eydelman, did not immediately respond to requests for comment. Mr. Eydelman had agreed in January to plead guilty, but had yet to formally do so.
Prosecutors said Mr. Metro, of Katonah, New York, would go to Manhattan bars or coffee shops to give Mr. Tamayo tips about Simpson Thacher clients.
Mr. Tamayo would then meet Mr. Eydelman near the main clock in Grand Central Station, show Mr. Eydelman a ticker symbol to memorize, and then chew and occasionally swallow the napkin or Post-it containing the tip, prosecutors said.
Authorities said the scheme unraveled in early 2014 after Mr. Tamayo began recording conversations with the other defendants. This included an instance when Mr. Eydelman gave him a cigar box containing $7,000 to help Mr. Metro buy and renovate a new home.
“Take these cigars, put it to good use,” Mr. Eydelman told Mr. Tamayo, court papers show.
Mr. Eydelman faces up to 20 years in prison on the fraud counts when he is sentenced on Dec. 21, and will forfeit ill-gotten gains. He may get a shorter prison term after having acknowledged responsibility, according to his plea agreement.
Neither Morgan Stanley nor Simpson Thacher was accused of wrongdoing. They have fired Messrs. Eydelman and Metro, respectively.