Broker Involved in Sticky Note Insider Case Settles With SECby
A former stockbroker agreed to pay about $2.5 million to settle U.S. Securities and Exchange Commission claims that he participated in an insider-trading scheme in which a middleman at least once consumed a sticky note to destroy evidence he shared nonpublic information.
Vladimir Eydelman, who was employed by Oppenheimer & Co. and later by Morgan Stanley, reached an agreement with the SEC to turn over more than $1.23 million in illicit profits and pay a similar amount in a civil penalty, the agency said in a statement Friday. Under the deal, subject to court approval, the disgorgement would be satisfied by forfeiture or restitution in a parallel criminal case, the SEC said. He pleaded guilty to the criminal charges last month.
Frank Tamayo, who agreed to cooperate with the SEC’s probe in reaching a settlement in July, was a middleman in a scheme involving Eydelman and Steven Metro, a former law clerk at Simpson Thacher & Bartlett, the SEC said.
Tamayo would meet Eydelman near a clock in New York’s Grand Central Terminal and show him napkins or sticky notes with the names or stock symbols of companies -- clients of Metro’s firm -- involved in pending transactions, according to the SEC’s March 2014 complaint. On at least one occasion, Tamayo then ate the note, the agency said.
The SEC’s case is continuing against Metro, who was charged in federal court in New Jersey in January for taking part in a five-year scheme that prosecutors said made $5.6 million in profit. The agency wants Metro to turn over ill-gotten gains plus interest and fines.
An attorney for Eydelman didn’t immediately return a call seeking comment.