NFL
Former Browns Linebacker Mychal Kendricks Faces Up to 25 Years In Federal Prison
On August 29th, the general public and the Cleveland Browns learned of Mychal Kendricks’ transgressions. A 21-page complaint was filed that day by the US Attorney’s Office (Eastern District of Pennsylvania), in which Kendricks, the now-former NFL linebacker, was named for insider trading back in 2014.
Shortly after, the Browns announced they would be releasing the 27-year-old LB. Just a few months ago, Kendricks was hoisting the Lombardi Trophy over his head in Minnesota with the Philadelphia Eagles. Now, the Super Bowl Champion faces up to 25 years in federal prison.
The Crime
Who
Two names you may be hearing that aren’t ringing a bell: Damilare Sonoiki and Compuware. Sonoiki, a “former friend” of Kendricks and Harvard graduate, is both a former junior analyst at Goldman Sachs and TV screenplay writer. Sonoiki may be most known for his hand in ABC’s “Black-ish.”
Compuware is a software company based out of Detriot Michigan, owned by parent company, Thoma Bravo. The connection between these two names? Compuware was a client of Goldman Sachs, Sonoiki’s employer at the time the crimes were committed.
The Federal Bureau of Investigation conducted the investigation while Assistant United States Attorney David J. Ignall will be overseeing the prosecution.
What
Compuware, which was a publically traded company, looked to undergo a transition to a private company between 2014 and 2015. Additionally, several other companies were in discussions with Compuware about potential mergers.
These companies included, Move, Sapient, and Oplink. As a client of Goldman Sachs, Compuware was under the advisement of Goldman Sachs regarding the potential transitions. Move, Sapient, and Oplink, who were in discussions of potential mergers were also clients of the global investment bank.
Sonoiki allegedly passed private information regarding the mergers and transitions onto Mychal Kendricks. By receiving this information, Kendricks was able to make investments in the aforementioned companies for a profit he would not have been able to ensure or garner otherwise.
According to the 21-page complaint, Kendricks’ did act on this knowledge thereby committing insider trading. As a result, Kendricks’ cashed in. The LB allegedly made the following approximate profits off his investments in each company:
- Compuware: $78,000
- Move: $279,000
- Sapient: $489,000
- Oplink: $352,000
- Total Approximate Profit: $1.2 million.
The complaint also states that according to their investigation, “defendant Kendricks provided defendant Sonoiki with tickets to Eagles games and approximately $10,000 in cash” in return for the information. Both Sonoiki and Kendricks have been charged as co-defendants in the case, resulting in Kendricks pleading guilty on September 6th.
When
- Alleged Insider Trading Took Place: July 2014-March 2015
- Eagles Release Mychal Kendricks: May 22nd, 2018
- Browns Made Aware Mychal Kendricks is Involved in Investigation (as a victim): Between May 22nd and August 29th
- News Breaks of Investigation and Indictment: August 29th, 2018
- Browns Release Mychal Kendricks: August 29th, 2018
- Mychal Kendricks Appears Before Judge and Pleads Guilty: September 6th, 2018
- Sentencing Date: December 18th, 2018
- US Attorney’s Office Begins Investigation: *Unknown
- Mychal Kendrick’s is Made Aware of Investigation: *Unknown
While Kendricks knew of the investigation’s focus in his role, the Browns did not. Between the time he was released by the Eagles (May 22nd), and when the investigation became public (August 29th), Mychal made the Browns aware that there was an investigation. According to Cleveland Browns General Manager, John Dorsey, Kendricks told them he was a victim.
“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.”
Kendrick’s “Why”
Mychal Kendricks released a statement as a result of the news breaking on August 29th. In his statement, Kendrick’s both admitted guilt and expressed regret. Mychal also offered an odd explanation for his actions but maybe relatable to other pro players. The LB admitted that while he loves the game of football, he wanted to be “more than a football player.”
Here is the official statement from @MychalKendricks Mychal Kendricks on insider trading. pic.twitter.com/s34337jvsi
— Jordan Schultz (@Schultz_Report) August 29, 2018
The (Potential) Time
Mychal Kendricks will learn his fate on December 18th from U.S. District Judge, Gene E.K. Pratter. According to the U.S. Attorney’s office, each defendant could face a maximum of 25 years’ imprisonment.
This would also include, a three-year parole period along with a $5,250,000 fine and forfeitures from profits gained from the crimes committed. So while it is possible that Kendricks could spend 25 years in federal prison, it is not likely. Legal experts estimate that if he sees the inside of a prison cell, it will be between 8-12 months.
Spoke with attorney/legal analyst David Weinstein. He estimates #Browns LB Mychal Kendricks is likely to serve 8-12 months in prison for insider trading. Advisory sentence would likely be higher but reduced by split sentence, house arrest, community service, etc.
— Cody Benjamin (@CodyJBenjamin) August 29, 2018
Photo Credit:
Featured Image courtesy of Donald Trump
