Man pleads guilty to... eating napkins to hide insider trading
No phone call or text message about an illicit hot stock tip is safe from US regulators.
So one man thought he had a perfect no-technology foil in the digital age: Post-it notes.
And that's what he did for more than five years - turning over lucrative insider tips to his stock broker, written on the small sticky notes.
Frank Tamayo would show the broker, Vladimir Eydelman, the tip information on Post-it notes, or sometimes a paper napkin, inside New York's Grand Central Station.
And then Tamayo would chew up and eat the note "to destroy evidence of the tip," the Securities and Exchange Commission (SEC) said.
Scheme yielded $7 million
The scheme would over time garner Eydelman, Tamayo's own source, college friend and corporate lawyer Steven Metro, and others who benefited US$5.6 million (S$7 million) before the SEC caught on.
According to charges filed on Friday by the SEC, Metro would access information on deals under way by corporate clients of his law firm, Simpson Thacher & Bartlett LLP, and give it to Tamayo.
In meetings inside the opulent New York rail station, Tamayo would show the broker sticky notes with cryptic details of the companies involved.
The intent was "to create a paper trail of false and contrived e-mails that purportedly served as non-fraudulent bases for the illegal trading by Tamayo and Eydelman," the SEC said.
Besides the SEC charges, which could result in large fines, Tamayo also faces federal criminal charges.
Eydelman and Metro are facing similar civil and criminal charges. - AFP