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.
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, a major New York law firm.
“He has accepted responsibility for what he did, and is ready to make amends,” Eydelman’s lawyer Walter Timpone said in a phone interview.
According to prosecutors, the $5.6 million, five-year insider trading scheme also involved Frank Tamayo, a Brooklyn, New York mortgage broker, and Steven Metro, a former Simpson Thacher managing clerk, who were also criminally charged.
Prosecutors said Metro, of Katonah, New York, would go to Manhattan bars or coffee shops to give Tamayo tips about Simpson Thacher clients.
Tamayo would then meet Eydelman near the main clock in Grand Central Station, show 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 Tamayo agreed to secretly record conversations with the other defendants. This included an instance when Eydelman gave him a cigar box containing $7,000 to help Metro buy and renovate a new home.
“Take these cigars, put it to good use,” Eydelman told Tamayo, court papers show.
Tamayo, 42, pleaded guilty last September. Metro, 41, pleaded not guilty and faces a Feb. 8, 2016 trial.
Eydelman is scheduled to be sentenced on Dec. 21, and according to his plea agreement could get a 57- to 71-month prison term under recommended federal sentencing guidelines.
He faces a maximum 20-year term on the fraud counts, and will also forfeit ill-gotten gains.
Eydelman is now living with his parents, his lawyer said.
Neither Morgan Stanley nor Simpson Thacher was accused of wrongdoing. They have fired Eydelman and Metro, respectively.
James Froccaro, a lawyer for Metro, did not immediately respond to a request for comment.