Former Morgan Stanley and Oppenheimer broker charged with insider trading

Vladimir Eydelman, the former Morgan Stanley and Oppenheimer Holdings broker arrested on insider trading charges last week, could expose some former clients and the firms to regulatory and legal actions, lawyers and securities industry veterans said.

Eydelman, who was charged with fraud on March 19 by the SEC and the Justice Department, allegedly made more than $5.6 million in illicit profit over three-and-a-half years for himself, friends and more than 50 clients, by trading in securities of companies involved in undisclosed merger deals and tender offers that were leaked by a law-firm employee.

The cloak-and-dagger details of the insider operation – including how a middleman swallowed Post-It notes scribbled with ticker symbols to be traded – made headlines. FINRA has said that examining procedures at brokerage firms for weeding out the bad apples is one of its priorities this year.

Eydelman, 42, had a history of job-hopping, a record of customer complaints and an apparent burst of productivity in recent years, according to the lawsuits and FINRA filings. Though he settled down more recently to work at just two firms over the last 13 years – he was at Oppenheimer for almost ten years before moving to Morgan Stanley in September 2012 – the lawsuits abound with examples of areas where Eydelman apparently evaded compliance overseers.

FINRA arbitration is a dispute resolution process offered by the Financial Industry Regulatory Authority (FINRA) to resolve conflicts between investors, brokerage firms, and individual brokers. Unlike traditional court litigation, arbitration is typically faster and less formal. In this process, an impartial arbitrator or a panel of arbitrators listens to both parties’ arguments and evidence before making a binding decision. This method is often chosen for its efficiency and lower costs, making it an attractive option for investors seeking resolution without the complexities of a court trial. The arbitration process is governed by specific rules and procedures, ensuring a fair and equitable hearing. While the decision is final and generally cannot be appealed, parties can still settle the dispute before the arbitration concludes. FINRA arbitration serves as a crucial mechanism in maintaining market integrity and protecting investors’ rights.