New take on insider trading
Two Americans have been charged with netting nearly US$6 million ($7 million) through an insider trading scheme that involved jotting illicit information down on napkins that were later eaten.
US prosecutors in New Jersey laid the charges against the managing clerk of a New York City law firm and a Morgan Stanley stockbroker.
Steven Metro stole insider information from the law offices of Simpson Thacher & Bartlett and passed it on to a friend who became a co-operating witness, according to federal prosecutors in Newark, New Jersey.
The co-operating witness would then divulge the information to Vladimir Eydelman, a stockbroker who worked at Oppenheimer & Co and then at Morgan Stanley, authorities said.
FBI agents arrested Metro, 40, and Eydelman, 42, on Wednesday.
William Silverman, a lawyer for Eydelman, and Metro's attorney, James Froccaro Jr., did not immediately return messages seeking comment.
The scheme began in 2009, prosecutors said.
They said Metro repeatedly obtained inside information regarding anticipated corporate mergers and acquisitions on which his firm was working.
They said he would arrange to meet the cooperating witness to pass on the inside information, which included the stock exchange ticker symbol of the company in which to invest.
The cooperating witness would write the information on a small piece of paper or napkin, prosecutors said.
The witness would then meet with Eydelman near the clock at Grand Central Terminal to give him the stolen information, prosecutors said.
The cooperating witness would show Eydelman the napkin or piece of paper with the ticker symbol, they said.
Eydelman would memorize the ticker symbol and the cooperating witness would put the paper into his mouth and chew it, they said.
Metro and Eydelman are charged with conspiracy to commit securities fraud, securities fraud and tender offer fraud.
The Securities and Exchange Commission also charged the two with insider trading on Wednesday.