Ex-Barclays Director Faces Prison for Tipping Plumber Friendby
Plumber made $76,000 from illegal trades, government says
McClatchey admits taking cash in exchange for merger tips
A former Barclays Plc director admitted he tipped a plumber friend about expected merger deals in exchange for cash. The government claimed he also had his bathroom renovated for free.
Steven McClatchey, 58, pleaded guilty Tuesday after prosecutors said he passed information that Gary Pusey used to make 11 illegal trades in companies including Questcor Pharmaceuticals Inc., PetSmart Inc., Emulex Corp. and Omnicare Inc. Pusey, who has pleaded guilty, made $76,000 on the trades, prosecutors said.
McClatchey on Tuesday admitted passing the tips and agreed he got cash from his friend -- but he drew the line at the bathroom renovations.
"That’s a little in question," McClatchey said when asked by U.S. District Judge Katherine Polk Failla in Manhattan whether he received any professional services in return for the tips.
McClatchey and Pusey met several years ago at the Yachtsmen’s Cove marina in Freeport, New York, where they had identical fishing boats that they kept in adjacent slips, according to the Securities and Exchange Commission, which is suing both men. The two became close friends, spending most Saturdays at the marina or, in cold weather, playing pool and watching sports in McClatchey’s renovated garage. In exchange for tips, Pusey gave McClatchey thousands of dollars in cash, which the plumber placed in a gym bag that McClatchey brought to a marina or handed over in McClatchey’s garage, prosecutors said.
The scheme ran from March 2014 to August 2015, prosecutors said.
McClatchey pleaded guilty to conspiracy and securities fraud. He’s scheduled to be sentenced Oct. 25. Under federal guidelines, which aren’t binding on the judge, McClatchey may receive a sentence of 10 to 16 months in prison.
McClatchey worked in Barclays’ investment-banking division and reported directly to the company’s global head of mergers and acquisitions, according to the SEC. He was responsible for putting together a weekly presentation to keep executives abreast of potential mergers involving bank clients.
McClatchey’s lawyer, Steven Kartagener, declined to comment after the hearing.
Pusey pleaded guilty on May 27 to conspiracy and fraud charges. He’s cooperating with prosecutors, hoping to get leniency at sentencing.
The case is U.S. v. McClatchey, 16-mag-03433, U.S. District Court, Southern District of New York (Manhattan).