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Press Release

Mortgage Broker Admits Trading On Inside Information Stolen From Prominent New York Law Firm

For Immediate Release
U.S. Attorney's Office, District of New Jersey

TRENTON, N.J. - The middleman in a five-year insider trading scheme admitted today to receiving numerous trading tips from a law firm source and passing the tips on to his broker-dealer to trade, yielding net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.

Frank Tamayo, 41, of Brooklyn, New York, surrendered this morning to the FBI and pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.

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

Tamayo, a mortgage broker, admitted that from 2009 to 2013, he obtained material nonpublic information from his friend and former law school classmate, Steven Metro, 40, of Katonah, New York. Metro was then the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, a law firm specializing in mergers and acquisitions. The inside information divulged by Metro to Tamayo concerned mergers, acquisitions, or tender offers in which the firm represented a party or financial advisor. As the firm’s managing clerk, Metro did not personally work on most these transactions. Instead, Metro stole the information by scouring the firm’s computer system for client names and the keywords “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”

After stealing material information, Metro would personally meet Tamayo at bars, coffee shops, or other locations near their Manhattan workplaces. Tamayo admitted that during these meetings, Metro gave him the names and ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once public. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and then commit the information to memory.

Tamayo would then meet with his broker-trader Vladimir Eydelman, 42, of Colts Neck, New Jersey, who was employed first at Oppenheimer & Co. and later at Morgan Stanley. Tamayo and Eydelman met at locations near Eydelman’s workplace, including the large clock in New York City’s Grand Central Terminal. Tamayo admitted that during these meetings, he 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 put the paper or napkin into his mouth and chewed it until it was destroyed.

Using the stolen information, Eydelman purchased securities for himself, family members, friends, and clients, including Tamayo. Eydelman quickly sold the shares and covered any options positions once the relevant deal was publicly announced and the stock price rose.

Tamayo admitted he 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 Metro for the inside information.

By exploiting the material information that Metro stole from the firm, Tamayo, Metro and Eydelman netted more than $5.6 million in illicit profits over the course of the five-year insider trading scheme.

Tamayo faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count; and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. Tamayo agreed to pay a forfeiture money judgment of more than $1 million and to forfeit certain property, including the contents of two brokerage accounts and a 2008 Audi Q7 automobile. He is scheduled to be sentenced on Dec. 23, 2014.

Metro and Eydelman have been charged by complaint for their own involvement in the insider trading scheme. The charges and allegations contained in the complaint are merely accusations, and defendants Metro and Eydelman are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke. The SEC today filed a civil complaint against Tamayo. U.S. Attorney Fishman also thanked the Financial Industry Regulatory Authority for their assistance.

The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Unit Chief Marion Percell and Assistant U.S. Attorney Barbara Ward 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: A. Ross Pearlson Esq. and Matthew E. Beck Esq., West Orange, New Jersey

Insider Trades






Sirius XM Radio




Brinks Home Security




Smithtown Bancorp




CNA Surety Corporation




Graham Packing Company Inc.




SMART Modular Technologies




Vital Images, Inc.




International Coal Group, Inc.




PharMerica Corp.




Collective Brands, Inc.




“Company A”




Sealy Corporation




Officemax Inc.




Tamayo, Frank Information

Updated August 21, 2015

Press Release Number: 2/12/2009-2/13/2009