A former Barclays director was arrested on Tuesday on charges of passing insider information on upcoming mergers to his friend, a plumber, who allegedly repaid him in part by doing up his bathroom.
Steven McClatchey, 58, was charged in a criminal complaint filed in Manhattan federal court with conspiracy, wire fraud and securities fraud after the plumber, Gary Pusey, pleaded guilty on Friday and agreed to co-operate with authorities. Mr Pusey also faced conspiracy, securities fraud and wire fraud charges and the Securities and Exchange Commission has also filed insider trading charges against the two men.
Government officials allege Mr McClatchey gave tips to Mr Pusey, 47, ahead of at least 10 separate transactions before they became public, including deals involving Petsmart, CVS Health and Duke Energy.
In exchange for the tips, which allegedly earned him $76,000 in trading profits, Mr Pusey made cash payments totalling thousands of dollars to Mr McClatchey by occasionally placing cash in a gym bag or handing over the cash directly in Mr McClatchey’s garage, it is alleged. He also allegedly provided a free refitting of Mr McClatchey’s bathroom at his home in Freeport, on the south shore of Long Island.
In a statement, the bank said: “Barclays wholly supports the Southern District of New York, the SEC and the FBI in their respective investigations, and has co-operated fully with them since learning about this incident involving a former employee. We have rigorous and extensive conduct and compliance training at Barclays which we underpin with a steadfast commitment to acting with integrity and respect. Barclays will take appropriate action when employees do not hold themselves to the conduct and control standards which are embedded in our culture.”