Cleveland Browns linebacker Mychal Kendricks works out during practice at the NFL football team's training camp facility in June, in Berea, Ohio. (AP Photo/Tony Dejak)
Cleveland Browns linebacker Mychal Kendricks was charged by the Securities and Exchange Commission Wednesday with insider trading in advance of corporate acquisitions facilitated through coded text messages and FaceTime conversations with a former investment banker, who was also charged.
The SEC alleges in its complaint that after meeting at a party, 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.
According to the complaint, from July 2014 through November 2014, Sonoiki tipped Kendticks about at least four corporate acquisitions that the investment bank was advising in advance of those deals being announced to the public.
Based on these tips, the former Philadelphia Eagles linebacker Kendricks "purchased the securities of the companies that were about to be acquired and made approximately $1.2 million in illegal profits," in one instance generating a nearly 400% return on his investment in just two weeks, the complaint states.
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.
