Final Judgment Entered Against NFL Player for Insider Trading
SEC had charged linebacker Mychal Kendricks with trading on illegal tips.
The Securities and Exchange Commission announced Monday that it obtained final judgments against an NFL player and another defendant who had been charged with insider trading in 2018.
Linebacker Mychal Kendricks, a free agent who last played for the Seattle Seahawks, had been charged by the SEC 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’s complaint was filed Aug. 29, 2018, and alleged that Kendricks received illegal tips from co-defendant Damilare Sonoiki, an analyst at an investment bank at the time, about several upcoming corporate mergers. The SEC alleged that Kendricks traded on that information for a profit of about $1.2 million.
On Nov. 2, 2018, the SEC filed a related complaint against Hamed A. Ettu, a family friend of Sonoiki, alleging that Ettu also traded based on information that he received from Sonoiki concerning two upcoming corporate acquisitions for a profit — in his case — of about $93,000.
The U.S. District Court for the Eastern District of Pennsylvania entered final judgments on consent against Kendricks and Ettu March 18.
The judgments permanently enjoin them from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, while ordering Kendricks to pay disgorgement of $1.2 million and ordering Ettu to pay disgorgement of $73,244, which accounts for a $20,000 debt Sonoiki owed to Ettu, the SEC said Monday.
The monetary relief was deemed satisfied by forfeiture orders entered against Kendricks and Ettu in a parallel criminal action brought by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the SEC noted.
Kendricks previously pleaded guilty to securities fraud and conspiracy to commit securities fraud, and had not yet been sentenced as of Monday, the SEC said. Ettu pleaded guilty to conspiracy to commit securities fraud and was sentenced to probation for a term of 3 years, including 9 months of home detention, the SEC added.