NEW YORK A former director at Barclays Plc (BARC.L) was arrested on Tuesday on U.S. charges that he provided inside information about impending mergers that he learned about at the bank to a plumber, who used the tips to illegally make $76,000.
Steven McClatchey, 58, was charged in a criminal complaint filed in Manhattan federal court with conspiracy, wire fraud and securities fraud after the plumber, Gary Pusey, secretly pleaded guilty on Friday and agreed to cooperate with authorities.
McClatchey, who worked at the British bank in its Manhattan offices from December 2008 to December 2015, was arrested on Long Island, where he resides, and was expected to appear in court later in the day.
Lawyers for McClatchey and Pusey, 47, could not immediately be reached for comment.
The charges were announced by Manhattan U.S. Attorney Preet Bharara, whose office has been engaged in a crackdown on insider trading that since 2009 has resulted in 102 people being charged and 78 being convicted.
That crackdown has suffered significant setbacks more recently following a 2014 appellate ruling that limited the scope of the applicable laws, resulting in charges being dropped or dismissed against 14 insider trading defendants. ,
As part of his job, McClatchey was responsible for tracking all potential deals in which the bank was involved, enabling him to obtain highly confidential information on them, according to the complaint and a related U.S. Securities and Exchange Commission lawsuit filed on Tuesday.
He began tipping Pusey, a friend he met through boating, as early as 2013, enabling the plumber to execute trades ahead of merger announcements involving 11 companies, including Forrest Oil Corp and PetSmart Inc.
In exchange, Pusey made thousands of cash payments to McClatchey, in some instances placing cash in a gym bag that McClatchey brought with him to a marina in Freeport, New York, and also provided home renovation services.
While Barclays was not identified by name in court papers, the bank confirmed it was the British investment bank that had employed McClatchey.
In a statement, Barclays said it has cooperated fully with authorities, including the Federal Bureau of Investigation and the SEC "since learning about this incident involving a former employee."
The cases in the U.S. District Court, Southern District of New York, are U.S. v. McClatchey, No. 16-mj-3433, and Securities and Exchange Commission v. Pusey, No. 16-cv-04029.
(Reporting by Nate Raymond in New York; Editing by Jonathan Oatis and Cynthia Osterman)
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Published Date: Jun 01, 2016 01:30 AM | Updated Date: Jun 01, 2016 01:30 AM