Cleveland Browns linebacker Mychal Kendricks was charged with insider trading in a recent court decision, according to an announcement made by the U.S. Attorney’s Office of the Eastern District of Pennsylvania on Wednesday morning.
In a news conference, U.S. Attorney William M. McSwain said that Kendricks and his co-defendant, television writer and producer Damiliare Sonoiki, were both charged with one count of conspiracy to commit securities fraud and one count of securities fraud. Sonoiki allegedly gave Kendricks non-public information on corporate mergers in 2014, at a time when he was still working for Goldman Sachs. As noted by USA Today, this allowed Kendricks to make about $1.2 million in profit by investing in a number of companies that the New York-based bank was preparing to acquire. At the time of the alleged securities fraud, Kendricks was still playing for the Philadelphia Eagles.
Furthermore, it was alleged that Kendricks repaid Sonoiki for his assistance by giving him $10,000 cash, Eagles game tickets, and other “kickbacks,” according to the NFL’s official website. Sonoiki, later on, left Goldman Sachs and began a career as a television writer for ABC’s Black-ish.
According to USA Today, Mychal Kendricks and Damiliare Sonoiki first met at a party in 2013, about one year before they allegedly started illegally trading insider information for kickbacks. While communicating with each other regarding the acquisitions, the men “used a variety of methods” to keep their conversations under wraps, such as the use of “coded language” when communicating via FaceTime or text messaging. Authorities added that the codes used by Kendricks and Sonoiki included references to the number 95, which is the same jersey number Kendricks used while playing for the Philadelphia Eagles.
All in all, authorities believe that Sonoiki informed Kendricks about at least four corporate acquisitions and that Kendricks leveraged his knowledge of the deals when executing trades through a brokerage account he had created for that purpose.
Browns LB Mychal Kendricks has been charged with insider trading by federal officials and allegedly made a profit of $1.2 million from investments four years ago.https://t.co/XY2AhM5c63
— SportsCenter (@SportsCenter) August 29, 2018
“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,” read a statement Mychal Kendricks and his attorney prepared for USA Today Sports.
“Since the beginning of the investigation, I have fully cooperated with all of 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.”
According to NFL.com, Kendricks could serve a maximum prison sentence of 25 years if convicted. A guilty verdict will also result in a three-year supervised release period and a $5,250,000 fine, as well as forfeiture of whatever money he might have earned from the illegal transactions.
A second-round draft pick in 2012 out of the University of California, Mychal Kendricks started at linebacker for the Philadelphia Eagles from 2012 to 2017 and helped the team defeat the New England Patriots to win their first-ever Super Bowl earlier this year. In June, he signed a one-year contract with the Cleveland Browns and was tentatively listed as the team’s backup strongside linebacker at the time of his indictment.
The Browns issued a brief statement on Twitter on Wednesday, confirming that the team is aware of Kendricks’ situation and that he will not be traveling to Detroit for the team’s final preseason game.