Low-Tech Inside Trading Man Busted

NEWARK (CN) - The middleman in a $5.6 million inside-trading scheme passed the illegal tips on post-it notes in Grand Central Station, and then ate the evidence, the SEC claims in court.

The SEC claims Frank Tamayo was the middleman in a scheme in which Steven Metro stole information about mergers and acquisitions from the law firm where he worked, (nonparty) Simpson Thacher & Barlett, which Vladimir Eydelman used to profit illicitly.

The SEC sued Eydelman and Metro on inside-trading charges in March.

It identified Tamayo as the middleman in its Sept. 19 lawsuit.

After Eydelman got the tips, he would return to his office and email Tamayo his "supposed thoughts about why buying the stock made sense," the SEC said in a statement. "Their intent was to create a paper trail of e-mails to make it appear they were making their trading decisions based on research and analysis rather than inside information."

Sometimes they met in coffee shops and Tamayo wrote the tips on a napkin, which he destroyed, sometimes by eating it, the SEC said.

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