Man who ate napkins to conceal insider trading pleads guilty

A 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 a three-man scheme that generated $5.6 million in illegal profits over five years. The scam was based on tips about a dozen transactions being negotiated by a prestigious New York law firm.

[Once satisfied his accomplice had memorised the information] Tamayo placed it into his mouth and chewed the paper or napkin to destroy it.

A charging document

Prosecutors said Tamayo would typically meet the law firm accomplice at Manhattan bars or coffee shops. He would then write the ticker symbols of stocks to be bought on napkins or Post-It notes, before passing them on to another stockbroker. Tamayo pleaded guilty to securities fraud, tender offer fraud, and conspiracy charges in the federal court in Trenton, New Jersey. He faces up to 20 years in prison on the fraud counts.

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