Possibly coming off watching Gordon Gekko on Wall Street, investment bank director Steven McClatchey pled guilty to conspiracy to commit securities and wire fraud and using insider trading.
Law Fuel expounds on the charges:
U.S. Attorney Preet Bharara said: “As he has now admitted through his guilty plea, Steven McClatchey abused his position at a major investment bank, tipping his close friend Gary Pusey with material, nonpublic information about mergers and acquisitions. Pusey traded on that market-moving information and rewarded McClatchey with cash kickbacks and home renovations in return.”
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MCCLATCHEY, who had served as a director at the Investment Bank since at least 2008, routinely possessed material, nonpublic information (“Inside Information”) concerning pending mergers and acquisitions in which the Investment Bank was involved. Indeed, among MCCLATCHEY’s responsibilities at the Investment Bank was the tracking of the status of all such pending transactions and the likely date on which such transactions would be publicly announced. MCCLATCHEY breached his duty of confidentiality to the Investment Bank and to its clients by providing Inside Information about pending M&A transactions to his close friend, Gary Pusey.
Specifically, from February 2014 through September 2015, MCCLATCHEY and Pusey participated in a scheme to commit insider trading in advance of and in connection with more than 10 separate mergers and acquisitions. MCCLATCHEY and Pusey were close friends who owned boats docked in a Long Island marina and who spent most Saturdays on their boats, at the marina, or playing pool and watching sports.
The inside information Pusey got from McClatchey allowed him to make successful trades in numerous securities, including those of Forest Oil Corporation, Questcor Pharmaceuticals, Inc., Zygo Corporation, Pepco Holdings, Inc., and Measurement Specialties, Inc.
If he does not win his case at Office’s Securities and Commodities Fraud Task Force, McClatchey will face a maximum sentence of 25 years in prison for each charge, as well as a maximum fine of $250,000 or twice the gross gain or loss from the offense.
