The football pro allegedly had inside information on the acquisition of the company, which operates the NAR’s Realtor.com
An NFL player has been charged with insider trading for allegedly using inside information to turn a profit when News Corp acquired Move, the company which operates Realtor.com for the National Association of Realtors.
Mychal Kendricks, currently a linebacker for the Cleveland Browns, was charged with insider trading along with Damilare Sonoiki, a junior analyst at a global investment bank. The Department of Justice alleged that the two conspired to commit securities fraud starting in 2014, when Kendricks played for the Philadelphia Eagles.
According to US Attorney William McSwain, Sonoiki obtained information on the upcoming mergers of four clients of his bank – Move, Sapient, Compuware and Oplink, and passed the information along to Kendricks, who then purchased call options in all four companies. When the proposed mergers were announced, the value of Kendricks’ options spiked. For instance, Kendricks purchased about $71,000 worth of call options for Move, and sold those options after the merger announcement for about $350,000 – a 393% increase. All told, Kendrick saw a $1.2 million profit from his investments.
In return, he allegedly gave Sonoiki a $10,000 kickback and Eagles tickets.
In a statement released by his attorney, Kendricks admitted to insider trading.
“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,” he said.
“When individuals engage in insider trading – buying and selling securities based on material, non-public information – it undermines faith in our financial markets and harms ordinary investors who do play by the rules,” McSwain said. “As alleged, Mr. Sonoiki and Mr. Kendricks cheated the market, cheated other investors, and placed themselves above the law.”
If convicted, Kendricks and Sonoiki each face up to 25 years of imprisonment, fines of more than $5.2 million, and forfeiture of all proceeds from the illegal trades.
