WESTCHESTER COUNTY, N.Y. -- A Westchester man, who was a former employee of a Manhattan law firm dealing in mergers and acquisitions, received more than four years in prison on Wednesday for taking part in an insider trading scheme that netted more than 5.6 million in profits for the participants, according to multiple reports.
Steven Metro, 42, of Katonah, a managing clerk at Simpson Thachter & Bartlett LLP, was indicted last January and later pleaded guilty to two counts of securities fraud and conspiracy to commit fraud.
The story behind Metro's insider trading scheme that took place from 2009 to 2013 reads like something out of an espionage novel. According to the Federal Bureau of Investigation press release, Metro searched the computer system of the firm using key words including terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names and client-matter numbers.
Metro would then meet with his co-conspirator, Frank Tamayo, 43, of Brooklyn, usually at a bar, coffee shop, or other location in midtown Manhattan. During the meetings, Metro provided Tamayo inside information including the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro, said the FBI.
After receiving the information, Tamayo would meet with a third conspirator, Vladimir Eydelman, 44, formerly of Colts Neck, a stock broker at Oppenheimer & Co., often under the big clock at a Grand Central Station. There, Tamayo would pass along the information and then eat the piece of paper, said NJ.com.
Eydelman would then buy stock ahead of the upcoming transaction and sell the shares at a profit when news of the transaction became public. Over the course of the scheme, the profits made on the transactions came to $5.6 million, with Metro's take only coming to $168,000, added NJ.com.
Tamayo and Eydelman both pleaded guilty to their part in the scheme.