In a market such as this one, where even a monkey throwing darts outperforms hedge funds, and the S&P only goes up in the year’s second melt up after a similar euphoric rush in January ended poorly, one would be troubled to find reasons why anyone would engage in insider trading.
And yet, moments ago that’s exactly what happened today when Super Bowl LII champion Mychal Kendricks was charged by federal authorities with insider trading, as U.S. attorney William McSwain announced in Center City, Philadelphia, on Wednesday. Tied to illegal investments he made in 2014, when he was still playing for the Eagles, the charges are likely to precede a guilty plea by the linebacker, as The Philadelphia Inquirer’s Jeremy Roebuck reported.
According to prosecutors, Kendricks – who now plays with the Cleveland Browns – used insider trading tips from an acquaintance to make about $1.2 million in illegal profits on four major trading deals.
U.S. Attorney William McSwain said co-defendant Damilare Sonoiki was paid $10,000 in kickbacks as well as perks like tickets to Philadelphia Eagles games. Kendricks played for the Eagles before signing with the Browns in June.
TV writer and former Goldman Sachs analyst Damilare Sonoiki was “brazenly passing along insider information,” including heads-ups on stock mergers and acquisitions, to Kendricks from 2013 to 2015,” the Philadelphia Inquirer reported. In exchange for the inside information, Kendricks allegedly provided $10,000 in cash and Eagles tickets to Sonoiki. An IMBD profile lists Sonoiki as a writer on the popular TV series “Black-ish” as well as other movies and TV shows.
Kendricks says in a statement released by his lawyer Wednesday that he’s sorry and “deeply” regrets his actions.
He says he “didn’t fully understand all of the details of the illegal trades.” His full statement is below.
“I would like to 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 this point, I had worked my tail off since I was 5 years old to become a football player. 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 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.”
Kendricks’ charges fall in “uncharted waters” for the NFL, according to Fox Sports’ Jay Glazer, who suggested Wednesday that the veteran’s violations “could fall under” the league’s personal conduct policy.
The Browns, meanwhile, who signed Kendricks in June, have released a statement of their own, saying they “are in communication with the league office” and that “Mychal will not make the trip to Detroit” for the Browns’ final preseason game this week.
Mychal Kendricks is facing federal insider trading charges.
Here’s the Browns statement. pic.twitter.com/4Omij9qOjK
— SB Nation (@SBNation) August 29, 2018
NFL spokesman Brian McCarthy says the league is reviewing the situation.