Professional sports leagues, particularly the NFL, are sitting in the catbird seat. Through TV contracts, online streaming deals and now sports betting, the NFL is practically minting money. That cash is trickling down to the players in the form of bigger contracts. That wasn’t enough for the Cleveland Browns’ Mychal Kendricks. He has earned about $20 million in salaries and bonuses over his four year career, he needed more. Kendricks allegedly turned $80,000 into $1 million via a brazen insider trading scheme:
Cleveland Browns linebacker Mychal Kendricks and former Goldman Sachs Group Inc. GS -0.07% banking analyst Damilare Sonoiki were charged Wednesday with insider trading in an alleged scheme that prosecutors say yielded about $1.2 million in profits for Mr. Kendricks.
The two men, both 27 years old, were charged with one count of securities fraud and one count of conspiracy to commit securities fraud. Their attorneys said both men are expected to plead guilty.
Prosecutors said each defendant, if convicted, could face a maximum prison sentence of 25 years and large fines. They may also be ordered to forfeit all proceeds from the alleged crimes. The Securities and Exchange Commission on Wednesday sued them both for securities fraud.
Prosecutors allege Mr. Sonoiki gave Mr. Kendricks inside information ahead of four corporate acquisitions in 2014, when Mr. Kendricks played for the Philadelphia Eagles. In each case, prosecutors say, Mr. Kendricks purchased call options and saw the value of those options jump after the merger was announced.
In return for the tips Kendricks allegedly rewarded Sonoiki with $10,000 in cash and other perks, such as Eagles tickets and invite to pop star Teyana Taylor’s music video set. Authorities say Kendricks and Sonoiki spoke over FaceTime and used coded text messages to hide the scheme.