Ex-Goldman Analyst Tipped Off NFL Linebacker for Tickets, U.S. Says

(Bloomberg) -- A Goldman Sachs Group Inc. analyst leaked nonpublic information about upcoming mergers to a National Football League linebacker in return for cash and tickets to Philadelphia Eagles games, the Justice Department said in announcing criminal charges against the two men.

Damilare Sonoiki, who worked for Goldman until 2015, passed the information to his friend Mychal Kendricks during a months-long scheme starting in 2014 that earned the football player about $1.2 million, federal prosecutors in Philadelphia said Wednesday.

The two men, both 27 years old, exchanged nonpublic information through coded text messages and FaceTime video conversations, according to a parallel civil lawsuit by the U.S. Securities and Exchange Commission. Kendricks invested in companies that were about to be bought out, and in one instance pocketed a return of almost 400 percent on an investment in just two weeks.

“Kendricks paid cash and shared celebrity perks for illegal tips that enabled him to trade and profit on confidential information that the rest of the investing public didn’t have,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.

Securities Fraud

The two men are accused of securities fraud and conspiracy to commit securities fraud, charges that could lead to maximum sentences of 25 years’ imprisonment and fines of more than $5 million for each of them, according to prosecutors. Michael Schwartz, a lawyer for Kendricks, didn’t immediately return a call for comment. It wasn’t immediately known who represented Sonoiki, who now lives in California, according to the SEC.

“We are aware of the situation regarding Mr. Sonoiki, who left Goldman Sachs over three years ago, and are cooperating with legal authorities,” the company said in a statement. “Protecting confidential information is our highest priority and we condemn Mr. Sonoiki’s alleged behavior.” Sonoiki didn’t respond to a telephone call seeking comment at a number listed under his name.

Kendricks, who played in Philadelphia before joining the Cleveland Browns earlier this year, met Sonoiki at a party in late 2013, according to the SEC. The two men exchanged contact information and stayed in touch in the ensuing months, the agency said. After learning in July 2014 that software company Compuware was going to be bought out by a private equity firm, Sonoiki texted Kendricks that he needed to talk right away.

Music Video

Within hours, Kendricks traveled to New York and the two met outside Goldman’s headquarters during the early hours of July 15. A few days later, Kendricks picked up an $850 tab for a car service to drive Sonoiki to a Pennsylvania nightclub and invited him to the set of a pop star’s music video, in which Kendricks made an appearance, the SEC said.

In the following weeks, Kendricks opened a brokerage account and Sonoiki began buying about $60,000 in call options of Compuware. The takeover was announced in early September 2014, netting about $78,000 in illegal profits. Days later, Sonoiki asked Kendricks if he could ‘hook [him] up’ with some tickets, the SEC said. He also texted with coded language about a cash payment, later receiving about $10,000:

“idk when next imma be able to see you ... so try to have the bread if you can ... the bread in nyc just isn’t the same and I really like my cheesesteaks with the stuff you all have in Philly.”

In a statement, the Cleveland Browns said Kendricks will not make the trip to Detroit with the team for a game against the Lions on Thursday.

“We are aware of the situation and in communication with the league office as we gather more information,” the team said. “We will comment further at the appropriate time.”

Nigerian Immigrants

Sonoiki is a son of Nigerian immigrants and a Harvard graduate. While studying at the Ivy League school, he won a spot on the Harvard Lampoon, a magazine renowned as an incubator for screenwriters. He worked as a writer on the ABC television sitcom “Black-ish” during the 2015-16 season, the network said. ABC said he no longer works for the show, and declined any further content.

In an 2016 interview with medium.com, Sonoiki said he decided to make the move to Hollywood after two years at Goldman because he wanted a new challenge.

Sonoiki said his first year on Wall Street “was kind of cool because everything is new, but finance is, it can be a little soulless and it wasn’t very fulfilling, you know?”

--With assistance from Sridhar Natarajan, Scott Soshnick, Dawn McCarty and Christopher Palmeri.

To contact the reporters on this story: Matt Robinson in New York at mrobinson55@bloomberg.net;Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, ;Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott, Alexis Leondis

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