The scheme victimized not only a law firm but also corporate clients and the investors.

(Bloomberg) — The U.S. Securities and Exchange Commission sued a former Oppenheimer broker and a clerk at a New York law firm over claims they made illegal trades on inside information that netted $5.6 million over four years.

Steven Metro, managing clerk at law firm Simpson Thacher & Bartlett LLP, accessed confidential documents in the firm’s computer system and tipped information on corporate mergers to a middleman at meetings in a coffee shop, the SEC said in a complaint filed at federal court in New Jersey.

The middleman passed the tips to his broker, Vladimir Eydelman, who was then with Oppenheimer and now at Morgan Stanley, near the information booth at Grand Central Terminal. The middleman showed Eydelman a Post-It note or napkin with the name or stock symbol of the company whose shares were likely to increase, and on at least one occasion, proceeded to chew up the note, according to the complaint.

“This scheme victimized not only a law firm but also its corporate clients and ultimately the investors in those companies,” Daniel Hawke, chief of the SEC enforcement division’s market abuse unit, said in a statement.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey filed criminal charges today against Metro and Eydelman, the SEC said.

The SEC said Metro and Eydelman had no known defense counsel at this time.

 

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