Barclays Director Accused of Giving Insider Tips to a Plumber to Remodel His Bathroom
A former Barclays (BARCLAYS-PLC) director who allegedly gave his plumber illicit tips in exchange for remodeling his bathroom and cash was charged with insider trading on Tuesday.
According to the Securities and Exchange Commission, Barclays director Steven McClatchey gave his plumber friend, Gary Pusey, who has also been charged with insider trading, illicit tips on 10 different occasions ahead of public mergers and acquisitions announcements. According to people familiar with the matter, McClatchey was more of an office administrator who didn’t work with clients or manage transactions.
The information, which included deals involving CVS Health (CVS) and PetSmart (PETM), allowed Pusey to net about $76,000 since early 2014, according to the complaint. In return, Pusey allegedly offered his services for remodeling McClatchey’s bathroom free of charge, and paid McClatchey thousands in cash, which was typically placed in McClatchey’s gym bag while the two were at the marina where the two kept their fishing boats, or handed to him in his garage.
The SEC says McClatchey gained access to the information because one of his job responsibilities was to collect information about potential mergers and acquisitions related to Barclays’ clientele. Specifically, McClatchey was responsible for distributing an internal memo called the “M&A Global Weekly Business Update,” which listed deals that would likely go public soon.
“McClatchey misused his ready access to confidential information and regularly tipped Pusey,” the press release stated. “The complaint seeks a final judgment ordering McClatchey and Pusey to pay disgorgement of their ill-gotten gains plus interest and penalties, and permanently enjoining them from future violations of these provisions of the federal securities laws.”
Pusey pleaded guilty to the charges May 27, and agreed to help prosecute McClatchey.
Barclays noted that it has cooperated fully with the SEC, FBI, and Southern District of New York in the investigation.
“Barclays will take appropriate action when employees do not hold themselves to the conduct and control standards which are embedded in our culture,” a spokesman for Barclays said in a statement.
McClatchey was an employee at Barclays from 2008 to about December 2015, government documents revealed.