Trader Who Ate Post-It Notes Settles Insider Trading Case

Insider Trading - Securities Attorneys

On July 13, 2015, the Securities and Exchange Commission (SEC) announced a settlement with Frank Tamayo in connection with his SEC cooperation agreement in an insider trading case.  In that case, illegal stock tips were passed on post-it notes and napkins by law clerk Steven Metro to Tamayo who then delivered them to Vladimir Eydelman, a stock broker. According to the SEC charges, Tamayo would show Eydelman a piece of post-it or napkin with the ticker symbol of the company whose securities should be purchased and, would after chew on the evidence until it was destroyed or ingested.

Last year, the SEC charged Metro and Eydelman, with insider trading in connection with the scheme. The insider information originated from the law firm clients of Simpson Thacher & Bartlett LLP (the “Firm”) where Metro was employed as a law clerk. Through his position, Metro obtained information about pending corporate transactions for the Firm’s clients including mergers, acquisitions and tender offers.

According to the SEC action, after receiving the tips from Metro, Tamayo would meet Eydelman at Grand Central or other locations to show him the ticker symbols of companies with contemplated corporate transactions.  Using this information, Eydelman, then traded for himself, Tamayo, and other customers. According to criminal charges, the defendants made $5.6 million in profits on trades involving 13 corporate transactions that included Sirius XM Radio, Brinks Home Security and PharMerica Corp.

For his SEC cooperation, Tamayo will not face a monetary penalty from the SEC.  In the proposed final judgment, which is subject to court approval, Tamayo would be ordered to disgorge more than $1 million of his ill-gotten gains from the scheme, but that payment would be deemed satisfied by the entry of orders of forfeiture or restitution in the parallel criminal case, in which he has pled guilty.  Tamayo also would be permanently enjoined from future violations of federal antifraud laws and SEC antifraud rules.

Under the terms of the SEC cooperation agreement, Tamayo must continue to provide cooperation as a witness in the ongoing case against Steven Metro and Vladimir Eydelman.  The SEC charges seek disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and injunctions against them.

Court documents in the criminal case reflect that Tamayo pled guilty to fraud-related charges in and is awaiting sentencing.  The criminal charges against Eydelman, are still pending. Court documents indicate that Eydelman has entered into a plea agreement but the terms were not disclosed.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit  This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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