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Man who ate napkins to conceal insider trading pleads guilty

By Ged Carroll via Flickr (CC by 2.0)

By Ged Carroll via Flickr (CC by 2.0)

via Reuters:

A Brooklyn, New York mortgage broker, who would scribble secret stock tips on napkins and pass them to an accomplice in Grand Central station before eating them, pleaded guilty to insider trading on Friday, federal prosecutors said.

Frank Tamayo, 41, was the middleman in what prosecutors called a three-man scheme that generated $5.6 million in illegal profits over five years, based on tips about a dozen transactions being negotiated by a prestigious New York law firm.

Tamayo, who had been cooperating with authorities, pleaded guilty to securities fraud, tender offer fraud, and conspiracy charges in the federal court in Trenton, New Jersey, according to U.S. Attorney Paul Fishman in New Jersey.

The defendant also agreed to forfeit more than $1 million, the contents of two brokerage accounts, and a 2008 Audi Q7. He faces up to 20 years in prison on the fraud counts.

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