Would you risk $10,000 USD and some likely heavily comped NFL season tickets for a potential $1.2 million payout?
What if this trade was highly illegal and you moronically documented it with digital communications and Facetime calls?
The Securities Exchange Commission (SEC) alleges this is what two persons did from roughly 2013 to 2015.
Specifically current Cleveland Browns’ inside linebacker,, and his former Goldman Sachs associate Damilare Sonoiki, have both been charged by the US attorney’s office for financial crimes.
Both parties have been charged today with 1 count of conspiracy to commit securities fraud and 1 count of securities fraud.
If you watch tell a vision, you may have seen Mychal Kendricks win last year’s Super Bowl 52 while playing with the Philadelphia Eagles. Or perhaps you recently have seen Mychal on HBO’s Hard Knocks series, which will likely also cover this specific story on their season’s final show this upcoming Tuesday, September 4th.
Since parting from work with Goldman Sachs, former Harvard graduate Damilare Sonoiki has been living in California. Apparently writing for ABC’s sitcom “Black-ish” while also creating a comedic short called “African Booty Scratcher“.
What is most head scratching about this situation, is how would some alleged free football game tickets and about $10,000 USD in cash be worth risking your careers and reputations over?
For fellow long time depressed Browns fans, sports writer Tom Withers pretty much nailed what this news likely in part means to the franchise’s long suffering fan base.
Only the #Browns can give inside linebacker new meaning.
— Tom Withers (@twithersAP) August 29, 2018
NEW: US attorney announces insider trading charges against Cleveland Browns player Mychal Kendricks, alleging Kendricks profited $1.2M and provided $10k cash and Eagles tickets in exchange for information; Kendricks formerly played for the Philadelphia Eagles. pic.twitter.com/22kgC7Jmg0
— NBC News (@NBCNews) August 29, 2018
You can hear some of the formal press conference above on this story, and or read the official SEC press release below followed by mentioned football player already coordinately apologizing via his lawyer.
SEC Small Fry Fraud Headlines
Of course, one only needs to regularly read respected alternative financial media blogs like Wall Street on Parade to know that financial fraud remains rampant and systematic in our society today.
While small fry financial fraud prosecutions are indeed important and some can be headline stealing, especially when celebrities are potentially involved (e.g. famed lefty golfer, Phil Michelson).
The likely underfunded SEC would do better by the US citizenry at large, if it fully focused on prosecuting larger fish and frauds up their financial food chain.
SEC Charges NFL Player and Former Investment Banker With Insider Trading
Washington D.C., Aug. 29, 2018 —
The Securities and Exchange Commission today charged a professional football player and a former investment banker with insider trading in advance of corporate acquisitions facilitated through coded text messages and FaceTime conversations.
The SEC alleges that after meeting at a party, Mychal Kendricks began receiving illegal tips from Damilare Sonoiki, an analyst at an investment bank who had access to confidential, nonpublic information about upcoming corporate mergers. Kendricks allegedly made $1.2 million in illegal profits by purchasing securities in companies that were soon to be acquired and then selling his positions after the deals were publicly announced, in one instance generating a nearly 400 percent return on his investment in just two weeks.
According to the SEC’s complaint, Kendricks rewarded Sonoiki for his tips and other assistance, which included setting up an online brokerage account that both men could access, by providing cash kickbacks, free NFL tickets, and an evening on the set of a pop star’s music video in which Kendricks made a cameo appearance.
“As alleged in our complaint, Kendricks paid cash and shared celebrity perks for illegal tips that enabled him to trade and profit on confidential information that the rest of the investing public didn’t have,” said Stephanie Avakian, Co-Director of the SEC Enforcement Division.
“Kendricks and Sonoiki allegedly tried to evade detection by using a variety of communication methods to hide their misconduct, but we were able to use methodical investigative work to piece together a trail of evidence and expose their insider trading scheme,” said Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit.
The SEC’s complaint, filed in federal district court in Philadelphia, charges Kendricks and Sonoiki with fraud and is seeking the return of their ill-gotten trading profits plus interest and penalties.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania today announced parallel criminal charges against Kendricks and Sonoiki.
The SEC’s investigation, which is continuing, has been conducted by Rachael Clarke and Patrick McCluskey of the Market Abuse Unit in the Philadelphia Regional Office, with the assistance of John Rymas of the unit’s Analysis and Detection Center. The litigation will be led by Jennifer Chun Barry. The case has been supervised by Mr. Sansone and Kelly L. Gibson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Philadelphia, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.
Mychal Kendricks’ public apology below
I apologize. Four years ago, I participated in insider trading, and I deeply regret it. I invested money with a former friend of mine who I thought I could trust and who I greatly admired. His background as a Harvard graduate and an employee of Goldman Sachs gave me a false sense of confidence. To that point, I had worked my tail off since I was 5 years old to become the football player that I am today. I was drawn in by the allure of being more than just a football player. While I didn’t fully understand all of the details of the illegal trades, I knew it was wrong, and I wholeheartedly regret my actions.
Since the beginning of the investigation, I have fully cooperated with all of the authorities and will continue to do so. I accept full responsibility for my actions. Although I did not take any of the profits for myself, I am committed to repaying all of the funds gained illegally and accept the consequences of my actions.
I sincerely apologize to my coaches, the owners, and my teammates on the Eagles and the Browns, the NFL, and the magnificent fans to whom I owe my career. I also apologize to my family, who I have failed in this. You all deserve better, and I will work my hardest to re-earn your trust and respect, serve as an advocate to educate others, and show you that I will never be involved in anything like this again. Thank you for your time and hopefully your forgiveness.
About the Author
James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.
He has also been a long time bread and circus consumer. A suffering Browns fan since the late 1980s. Sports fans, if you thought John Elway’s ‘drive’ broke Browns fan’s hearts, try cheering for them over the last some 20 years of near absolute futility.