Securities Law

Fired Simpson Thacher managing clerk is indicted, accused of surfing firm computers for merger info

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A fired former managing clerk for Simpson Thacher & Bartlett is now front and center in a federal insider-trading case over a scheme that allegedly earned $5.6 million in illegal profits on $33 million in stock purchases.

Steven Metro, 40, was indicted (PDF) Thursday by a federal jury in Trenton, following reported plea deals by a law school classmate who served as a middleman and the stockbroker to whom the middleman allegedly passed tips about pending corporate mergers, according to the Am Law Daily (sub. req.) and NJ Advance Media.

He is accused of surfing the firm’s computers for information about pending mergers involving Simpson Thacher’s clients, then passing the information on to stockbroker Vladimir Eydelman, 42, via Touro Law Center classmate Frank Tamayo, 41.

Tamayo, who reportedly met Eydelman by the large clock at the information booth in Grand Central Station, conveyed the information and then chewed and swallowed the napkins and sticky notes on which he wrote the tips, pleaded guilty last year to securities fraud and conspiracy charges. He has not yet been sentenced.

A Thursday court filing said Eydelman has agreed to a plea deal but did not disclose the terms, the NJ Advance article reports

The indictment says Metro, who was responsible for making court filings for Simpson Thacher, had little or no role in the deals he disclosed, but obtained the information by searching the firm’s computer system. Key phrases he allegedly used included not only client names and matter numbers but phrases such as “merger agreement,” “due diligence” and “engagement letter.”

Simpson Thacher and lawyers for Metro and Eydelman did not respond to requests for comment by the Am Law Daily.

The law firm has previously said in a written statement provided to the ABA Journal that it knew nothing of Metro’s alleged wrongdoing and fired him the same day he was initially charged. His claimed conduct “is completely inconsistent with our values, our culture and the strict policies we have in place to protect client confidences,” the firm said

The insider-trading scheme took place between February 2009 and March 2014, the feds say.

See also: “Lawyer Raided Sullivan & Cromwell Offices for Inside Info Years Ago, Court Filings Say” “Ex-BigLaw Associate Sentenced to Record 12 Years Says ‘Excitement’ Drove $37M Insider-Trading Scheme” “Employee of Wilson Sonsini is charged with insider trading; firm calls case ‘deeply disturbing’”

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