Steven Metro of Katonah, N.Y., is the first of three admitted co-conspirators sentenced in a scheme that also involved stockbroker formerly of Colts Neck
U.S. Attorney Paul Fishman on Wednesday announced the sentencing of the first of three admitted co-conspirators in a $5.6 million insider trading scheme. TRENTON -- A former employee of a Manhattan law firm that deals in mergers and acquisitions was sentenced to nearly four years in prison Wednesday, after admitting he provided information used in an insider trading scheme to net $5.6 million in profits, U.S. Attorney Paul Fishman announced Wednesday.
The employee, Steven Metro, 42, of Katonah, N.Y., who managed the firm's law clerks, was indicted in January 2015 and later pleaded guilty to two counts charging him with securities fraud and conspiracy to commit fraud. He was sentenced Wednesday to 46 months in federal prison by Judge Michael A. Shipp in U.S. District Court in Trenton, Fishman said.
Like something out of an Oliver Stone film, prosecutors say that from 2009 to 2013, Metro searched the computer system of the firm, Simpson Thacher & Bartlett LLP, using key words like "merger agreement," "bid letter," and "due diligence," to find information on impending transactions involving companies represented or advised by Simpson Thacher.
Fishman said Metro would then meet a co-conspirator, Frank Tamayo, 43, of Brooklyn, in a coffee shop, bar or some other out-of-the way place, to pass along information including the company's stock symbol.
Typically, Fishman said, Tamayo would write the symbol down on a napkin or other piece of paper, and commit other basic information to memory.
He would then meet with still another conspirator, a stock broker at Oppenheimer & Co., named Vladimir Eydelman, 44, formerly of Colts Neck, often under the big clock at a Grand Central Station. There, Fishman said, Tamayo would pass along the information and stock symbol, then chew the piece of paper into a pulp.
Eydelman would then buy stock in the company ahead of the impending transaction, then sell shares at a profit after they rose in value once the news of the transaction became public, Fishman said. Over the course of the scheme, profits on those inside trade added up to $5.6 million, with Metro's share coming to $168,000, Fishman said.
Tamayo and Eydelman have both pleaded guilty it the scheme, with Tamayo scheduled sentencing on Thursday, and Eydelman is scheduled for Sept. 22.
Fishman, an appointee of President Barack Obama, said the charges were part of an effort by Obama's Financial Fraud Enforcement Task Force, created in 2009 to investigate and prosecute financial crime. Fishman said the campaign had yielded more than 10,000 financial fraud cases against nearly 15,000 defendants.
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