FEDERAL PROSECUTORS IN Philadelphia have said Super Bowl winner Mychal Kendricks used insider trading to attain $1.2 million in illegal profits through four major trading deals between 2013 and 2015.
The 27-year-old linebacker, who was released by NFL champions the Philadelphia Eagles in May and joined the Cleveland Browns a month later, is alleged by U.S. Attorney William McSwain to have paid co-defendant Damilare Sonoiki $10,000 in kickbacks as well as several perks.
These reportedly included tickets to Eagles fixtures and visits with singer-slash-model Teyana Taylor. There is no evidence to suggest Taylor had any knowledge of the arrangement between Sonoiki and Kendricks.
Prosecutors have confirmed that the two men are accused of securities fraud and conspiracy to commit securities fraud – charges that carry a maximum sentence of 25 years’ imprisonment and more than $5 million each in fines.
Per Bloomberg, the civil lawsuit brought against Kendricks and Sonoiki by the U.S. Securities and Exchange Commission (SEC) says the pair exchanged non-public information through coded text messages and FaceTime video conversations.
Kendricks invested in companies that were set to be bought out, and in one instance pocketed close to a 400% return on his investment in just a fortnight.
Sonoiki, currently a writer on popular ABC sitcom Black-ish, is Harvard-educated and was an analyst at investment bank Goldman Sachs as recently as 2015.
U.S. Attorney McSwain says he was “brazenly” passing along inside information to Kendricks between 2013 and 2015, noting that such conduct “undermines the public’s faith in our markets and harms ordinary investors that do play by the rules,” per the Inquirer.
“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,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.
Kendricks’ attorney, Michael Schwartz, shared a statement from the American football player himself this afternoon in which Kendricks admitted to the charge brought against him and apologised for his actions:
“I apologize. Four years ago, I participated in insider trading, and I deeply regret it,” he said.
“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,” Kendricks continued.
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.”
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