Mychal Kendricks released by Cleveland Browns after insider trading charge
PHILADELPHIA, Pennsylvania -- The Cleveland Browns released linebacker Mychal Kendricks late Wednesday after he was charged in an insider trading case.
Federal prosecutors allege Kendricks used insider trading tips from an acquaintance to make about $1.2 million in illegal profits on four major trading deals.
Co-defendant Damilare Sonoiki was paid $10,000 in kickbacks in the scheme from 2014-2015, as well as perks including tickets to Philadelphia Eagles games and tagging along to a music video shoot or nightclub appearances, said U.S. Attorney William McSwain. Kendricks played for the Eagles before signing with the Browns in June.
Sonoiki had been working as a junior analyst at an unnamed investment bank in New York, prosecutors said. An iMDB profile lists him as a writer on the popular TV series "Black-ish," as well as other movies and TV shows.
In a statement released by his lawyer Wednesday, Kendricks said he was sorry and takes full responsibility for his actions.
"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," he said in the statement. He also claimed he didn't take any of the profits for himself, but didn't elaborate on where the money went.
"I am committed to repaying all of the funds gained illegally and accept the consequences of my actions," he said.
Kendricks said he has been cooperating with authorities since the investigation began.
A message seeking comment from the federal defender representing Sonoiki wasn't immediately returned.
McSwain, along with representatives from the FBI and the Securities Exchange Commission, which filed a separate complaint, said Kendricks and Sonoiki used coded language in messages to try to hide their actions. McSwain said Sonoiki, who had limited trading powers at the time, would give non-public information to Kendricks about acquisitions and other deals that would affect the price of securities for at least four different companies.
Stephanie Avakian, co-director of the U.S. Securities and Exchange Commission's Division of Enforcement, said in one message when Sonoiki was asking for payment, he told Kendricks that he liked Philadelphia bread used in cheesesteaks more than the bread in New York and asked that Kendricks bring him some.
They also had a conversation pretending to be talking about changing the number on Kendricks' jersey to 80, meant to signify the amount of money that should be deposited into a new trading account, she said.
If the men are convicted, they could face up to 25 years in prison and a fine of up to $5.25 million, as well as the seizure of any profits made from the insider trading.
NFL spokesman Brian McCarthy said the league is reviewing the situation.
The Browns late Wednesday released a statement explaining their earlier dealings with Kendricks:
Prior to signing Mychal, we were informed that there was a financial situation that he had been involved with in 2014. We were told Mychal had fully cooperated with investigators as a victim. From what was communicated at that time and based on the numerous questions we asked and further due diligence on our part, including checking with the league office, there was no information discovered that conveyed otherwise.
Recently, we were provided an update on the matter and the circumstances have changed. We are now dealing with a different set of facts and the additional information we've gathered has led us to the decision to release Mychal from our team. Due to the ongoing legal nature of this situation, we will have no further comments.
The Browns signed Kendricks as a free agent in June, bringing on the Super Bowl winner to upgrade their linebacker corps following an 0-16 season. Kendricks spent six years with the Eagles, who drafted him in the second round in 2012.
The 5'11", 240-pounder recorded a team-high eight tackles in last season's NFC Championship against Minnesota and had four in Philadelphia's Super Bowl win.
