alleges that Vladimir Eydelman and Steven Metro
were linked through a mutual friend who acted as a middleman in the illegal trading scheme.
Metro, who works at Simpson Thacher & Bartlett in New York, obtained material nonpublic information about corporate clients involved in pending deals by accessing confidential documents in the law firm's computer system.
typically tipped the middleman during in-person meetings at a New York City coffee shop, and the middleman later met Eydelman, who was his stockbroker, near the clock and information booth in Grand Central Terminal.
The middleman allocated a portion of his
profits for eventual payment back to Metro
in exchange for the inside information.
also personally traded in advance of at least two deals.
In a parallel action, the U.S. Attorney's Office
for the District of New Jersey today announced criminal charges against Metro
, who lives in Katonah, N.Y., and Eydelman, who lives in Colts Neck, N.J.
According to the SEC's complaint filed in U.S. District Court for the District of New Jersey, the insider trading scheme began in early February 2009 at a bar in New York City when Metro
met the middleman and other friends for drinks.
and the middleman separated from the rest of their friends and began discussing stocks, the middleman expressed concern about his
holdings in Sirius XM Radio and his
fear that the company may go bankrupt.
divulged that Liberty Media Corp.
planned to invest more than $500 million in Sirius
, and said he
obtained this information by viewing documents at the law firm where he
The middleman told Metro
following the announcement that he
had set aside approximately $7,000 for Metro
as a "thank you" for the information.
Instead of taking the money, Metro
told the middleman to leave it in his
brokerage account and invest it on Metro's behalf based on confidential information that he
planned to pass him in the future.
According to the SEC's complaint, Metro
tipped and Eydelman traded on inside information about 12 more companies as they settled into a routine to cloak their illegal activities.
pointed to the names or ticker symbols to indicate which company was the acquirer and which was being acquired.
also conveyed the approximate price of the transaction and the approximate announcement date.
The middleman's agreement with Metro
resulted in more than $168,000 being apportioned to Metro
share of profits from the insider trading scheme in addition to his
profits from personally trading in advance of at least two transactions.
The complaint seeks a final judgment ordering Metro
and Eydelman to pay disgorgement of their ill-gotten gains plus prejudgment interest and penalties, and permanent injunctions from future violations of these provisions of the federal securities laws.