Barclays Banker Charged with Passing Inside Information to Plumber
May 31 2016 - 12:58PM
Dow Jones News
By Nicole Hong
A former Barclays PLC director was arrested Tuesday morning in
New York and accused of engaging in an insider-trading scheme with
his plumber.
Steven McClatchey, 58, was a former employee at Barclays, the
bank confirmed. Prosecutors said he worked for seven years at the
Manhattan office of Barclays, where he was responsible for tracking
the bank's involvement in potential mergers and acquisitions. He
distributed a weekly document to select Barclays employees called
"M&A Global Weekly Business Update," which included deals that
were likely to become public the following week.
Government officials allege Mr. McClatchey gave tips to his
friend who worked as a plumber ahead of more than 10 separate
mergers and acquisitions before they became public, including deals
involving PetSmart Inc., CVS Health Corp. and Duke Energy Corp.
The plumber allegedly paid Mr. McClatchey, in part, by providing
"home renovation" services free of charge.
The complaint didn't name the plumber, but a person familiar
with the matter identified him as Gary Pusey.
Mr. Pusey, 47, pleaded guilty last Friday and has been
cooperating with the government, according to the criminal
complaint. Mr. McClatchey faces more than a dozen criminal counts,
including wire fraud and securities fraud, and will make his first
appearance in Manhattan federal court on Tuesday.
Lawyers for Mr. McClatchey and Mr. Pusey didn't immediately
respond to requests for comment.
Barclays, which is described in the complaint only as
"Investment Bank A, " said it has cooperated with the government
"since learning about this incident involving a former employee."
Mr. McClatchey worked in a back-office role and didn't interact
directly with clients, according to a person familiar with the
matter.
Mr. Pusey had about $76,000 in ill-gotten gains from the inside
information, prosecutors said. When the tips were successful, Mr.
Pusey paid Mr. McClatchey by giving him cash in a gym bag or by
handing cash to him directly in his garage, according to the
complaint.
The two men became friends about four years ago, when they met
at the Long Island marina where they both docked their boats. They
began to spend most Saturdays together, the complaint said.
The first tip Mr. McClatchey gave Mr. Pusey came around 2013 or
2014, when Mr. McClatchey allegedly told the plumber to "keep an
eye on a particular company because something good was going to
happen," according to the complaint. Based on the tips, Mr. Pusey
bought securities in at least 11 companies, prosecutors said.
In one instance, Barclays in early 2014 began discussing the
possibility of representing Sabine Oil & Gas LLC in a deal with
Forest Oil Corp. Prosecutors alleged that as Mr. McClatchey fed
tips of the deal, Mr. Pusey bought about $23,000 in Forest Oil
shares. When Sabine and Forest Oil ultimately signed the merger
agreement, Forest Oil's stock rose 13.4% from the close of the
prior trading day.
--Max Colchester contributed to this article.
Write to Nicole Hong at nicole.hong@wsj.com
(END) Dow Jones Newswires
May 31, 2016 12:43 ET (16:43 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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