Linebacker Mychal Kendricks was released by the Cleveland Browns on Wednesday after federal prosecutors charged him with insider trading related to investments he made four years ago.
According to US Attorney William McSwain, Kendricks could face “substantial prison time” if he is convicted of the crimes.
Analyst Tipped Kendricks Off About Acquisitions
According to McSwain, Kendricks used insider information in order to make nearly $1.2 million in illegal profits on four investments. Television writer Damilare Sonoiki was also charged with assisting Kendricks in the scheme.
Prosecutors say that Sonokoi was formerly an investment banking analyst at a major bank, and that he tipped off Kendricks about four corporate acquisitions that were taking place in the second half of 2014. In exchange for the information, Kendricks gave Sonokoi $10,000 in kickbacks, as well as other benefits like tickets to Eagles games – the team Kendricks had played with for his first six seasons in the NFL.
Following the announcement, Kendricks released a statement in which he apologized for his role in the insider trades.
“Four years ago, I participated in insider trading, and I deeply regret it,” Kendricks said in a statement released through his attorneys. “I invested money with a former friend of mine who I thought I could trust and who I greatly admired. His background as a Harvard graduate and an employee of Goldman Sachs gave me a false sense of confidence.”
Kendricks went on to say that while he “didn’t fully understand all of the details of the illegal trades,” he did know it was wrong, and that he plans to pay back all of the funds he gained illegally.
Not All Crimes Treated Equally in NFL
Kendricks was selected by the Philadelphia Eagles in the second round of the 2012 NFL draft. He stayed in Philadelphia through the 2017 season, before being cut from the team this spring. According to ESPN, sources say that the Eagles knew of the investigation before releasing Kendricks. The inside linebacker has 14 sacks and three interceptions in his career.
The Browns also released a short statement in conjunction with releasing 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,” Browns general manager John Dorsey said in a statement. “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.”
The quick dismissal of Kendricks led to some perplexed reactions on social media, especially when compared to how teams have dealt with other criminal issues.
“Busted for drugs or accused of [domestic violence], they might keep you around and get you some help,” wrote CBSSports.com’s Matt Wintner. “But insider trading? This is where they draw the line?”
This isn’t the first time the Browns have been caught up in controversy over business decisions that had nothing to do with football. In 2013, Cleveland owner Jimmy Haslam was accused by an employee of Pilot Flying J – a truck stop chain that is owned by the Haslam family and for which Jimmy Haslam serves as CEO – of knowing about rampant rebate fraud in the company. Haslam never faced discipline from the NFL over the incident.
