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Justice News

Department of Justice
U.S. Attorney’s Office
District of New Jersey

Wednesday, September 14, 2016

Clerk Sentenced To 46 Months In Prison For Stealing Material Information From Prominent Law Firm For Use In $5.6 Million Insider Trading Scheme

TRENTON, N.J. - The former managing clerk for a prominent, international law firm was sentenced today to 46 months in prison for stealing sensitive, confidential information for use in a five-year insider trader scheme that yielded net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.

Steven Metro, 42, of Katonah, New York, previously pleaded guilty before U.S. District Judge Michael A. Shipp to the first two counts of an indictment charging him with securities fraud and conspiracy to commit securities and tender offer fraud. Judge Shipp imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

From 2009 to 2013, Metro stole material nonpublic information from his then-employer, Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The information related to corporate transactions, such as mergers and acquisitions or tender offers, in which the firm represented a party or financial advisor to the transaction. As the firm’s managing clerk, Metro did not personally work on most of these transactions. Instead, Metro stole the inside information by scouring the firm’s computer system for client names and the keywords “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”

After obtaining the inside information, Metro would meet his friend, Frank Tamayo, 43, of Brooklyn, New York, at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During these meetings, Metro provided Tamayo material information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and commit the rest of the inside information to memory.

Afterwards, Tamayo would meet Vladimir Eydelman, 44, formerly of Colts Neck, New Jersey, usually at a location near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal. Tamayo would show Eydelman the paper or napkin with the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo would place the paper or napkin into his mouth and chew it until it was destroyed.

After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s “source,” Eydelman then purchased securities for himself, family members, friends, and/or clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose. 

Throughout the course of the approximately five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to “cash out” his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source – i.e., Metro – for providing them the inside information.

By exploiting the information that Metro took from the firm, Metro, Tamayo and Eydelman netted more than $5.6 million in illicit profits over five years.

In addition to the prison term, Judge Shipp sentenced Metro to three years of supervised release and fined him $10,000.

Tamayo and Eydelman have both pleaded guilty to their roles in the scheme; Tamayo is scheduled to be sentenced Sept. 15, 2016, and Eydelman is scheduled to be sentenced Sept. 22, 2016. 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s sentencing.  He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Special Prosecutions Division of the U.S. Attorney’s Office in Newark, and R. Joseph Gribko of the U.S. Attorney’s Office in Trenton, as well as Unit Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.

These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit

Defense counsel:  James R. Froccaro Jr. Esq., Port Washington, New York

Securities, Commodities, & Investment Fraud
Updated September 14, 2016