by Howard Haykin

The SEC charged NFL player Mychal Kendricks and former Goldman analyst Damilare Sonoiki with insider trading, while the U.S. Attorney’s Office for the Eastern District of Pennsylvania is pursuing parallel criminal charges against the pair.

Kendricks, 27, a resident of Philadelphia and Cleveland, had from 2012 to 2018 been a linebacker with the Philadelphia Eagles of the National Football League. He recently spent the preseason with the Cleveland Browns, but was released by the team after SEC charges became public.

Sonoiki, 27, a resident of California, spent about a year (2013-2015) working for Goldman Sachs as an analyst in its investment banking division. Sonoiki held a Series 79 license.

SEC FINDINGS.    After meeting at a party, Kendricks began receiving illegal tips from Sonoiki, who had access to confidential, nonpublic information about upcoming corporate mergers. From July 2014 through November 2014, Sonoiki tipped Kendricks about at least 4 corporate acquisitions in which Goldman Sachs served as an adviser.

Using these tips, Kendricks purchased the securities of the companies that were about to be acquired and then made approximately $1.2 million in illegal profits by selling his positions after the deals were publicly announced. For his efforts, Sonoiki was compensated with 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.

Kendricks and Sonoiki used a variety of methods to conceal their communications. They attempted to minimize telephone calls, employed coded language in text messages, and used other methods of communication that they apparently believed would not be uncovered, such as FaceTime.

The SEC’s investigation continues.

[For further details, click on SEC Complaint.]