While there are a lot of non-criminals in the NFL, it seems as if the league has a problem with felonies. Whether the felony be domestic abuse, murder, sexual assault or other despicable acts, it’s not a great look for a league that’s already in dire trouble of losing its core fan base.
A star player just lost his starting job and just added another alleged crime to a growing list among the ranks of the NFL (sometimes referred to as the “National Felons League”)
In an announcement that surprised even some NFL Park Avenue executives, the federal government accused Cleveland Browns linebacker Mychal Kendricks of engaging in a bold insider trading scheme that allegedly transformed $80,000 into $1.2 million in profits over a mere four months.
Now the NFL’s league office is probing Kendricks under the personal conduct policy, in light of federal insider trading charges announced by the Securities and Exchange Commission on Wednesday.
As federal charges go, the ones aimed at Kendricks and former Goldman Sachs investment banker Damilare Sonoiki could have been ripped from the pages of a Hollywood script. Court documents allege a stunningly aggressive scheme with plenty of details, including envelopes of cash, clandestine late-night meetings, coded communications and a staggeringly productive brokerage account that drew the microscope of federal investigators. Ultimately, it culminated in charges of white-collar criminal malfeasance rarely seen among the player ranks in the NFL.
As one NFL Park Avenue executive said of the Kendricks charges Wednesday: “This is a new one.”
Not so much for the SEC, which is tasked with chasing down and prosecuting insider trading schemes – which are often defined by investors manipulating or profiting in financial markets on the basis of confidential information. The allegations laid out against Kendricks and Sonoiki appear to fall squarely in that wheelhouse, with the NFL player allegedly achieving a near 1,500 percent total return on an initial brokerage account investment of $80,000. According to the SEC, that windfall was achieved through options trading on four companies – all of which had advising ties to Goldman Sachs, the global investment bank employing Sonoiki.
“When individuals engage in insider trading … it undermines the public’s faith in our markets and harms ordinary investors who do play by the rules,” said U.S. Attorney William McSwain, whose office announced the charges Wednesday. “As alleged in the criminal information filed earlier today, Mr. Sonoiki and Mr. Kendricks were definitely not playing by the rules. Each has been charged with one count of conspiracy to commit securities fraud and one count of securities fraud.”
Kendricks, who won a Super Bowl with the Philadelphia Eagles last season, released a statement through his attorney accepting responsibility for his role in the scheme and professed remorse for his actions, while appearing to point a finger at Sonoiki. Kendricks added that he is cooperating with the federal investigation.
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