Browns LB Mychal Kendricks admits to insider trading after federal charges

Linebacker Mychal Kendricks of the Cleveland Browns during a preseason game against the New York Giants at MetLife Stadium in East Rutherford, New Jersey, August 8, 2018.
Nick Cammett | Diamond Images | Getty Images
Linebacker Mychal Kendricks of the Cleveland Browns during a preseason game against the New York Giants at MetLife Stadium in East Rutherford, New Jersey, August 8, 2018.

Federal authorities announced Wednesday that Cleveland Browns linebacker Mychal Kendricks and television writer/producer Damilare Sonoiki have been indicted on insider trading charges.

U.S. Attorney William M. McSwain said in a news conference that Kendricks allegedly received non-public information about corporate mergers in 2014 from Sonoiki, who was an employee at Goldman Sachs at the time. Kendricks then used that information to invest in the companies that were about to be acquired, McSwain said, and made approximately $1.2 million in profit.

Authorities allege that Kendricks then gave Sonoiki, who later left the bank and became a writer for the ABC series "Black-ish," a series of kickbacks ranging from cash to tickets to NFL games. Kendricks played for the Philadelphia Eagles at the time.

More from USA Today:
Thousands of bees swarm a Times Square hot dog stand
Chicago cop: Murder charge in Laquan McDonald shooting is 'political'
Who is David Katz? Suspect in shooting at Jacksonville Madden video tourney was 24

In a statement through his attorney provided to USA TODAY Sports, Kendricks admitted to participating in insider trading and apologized to the Browns, Eagles and NFL.

"While I didn't fully understand all of the details of the illegal trades, I knew it was wrong, and I wholeheartedly regret my actions," Kendricks said in part of the statement.

"Since the beginning of the investigation, I have fully cooperated with all of the authorities and will continue to do so. I accept full responsibility for my actions. Although I did not take any of the profits for myself, I am committed to repaying all of the funds gained illegally and accept the consequences of my actions."

The Browns said in a statement that they are "aware of the situation" and in communication with the league office.

"Mychal will not make the trip to Detroit (for the team's final preseason game Thursday)," the team said in the statement. "We will comment further at the appropriate time."

An NFL spokesperson told the Associated Press that "we are aware of today's developments and will review the matter."

According to civil charges filed by the U.S. Security and Exchange Commission, which were filed separately from the criminal charges filed by federal prosecutors, Kendricks and Sonoiki met at a party in 2013 and began trading insider information for kickbacks the following year. Authorities allege that Sonoiki tipped off Kendricks about "at least four corporate acquisitions" between July and November, and Kendricks used that information to execute trades through a newly-created brokerage account.

Kendricks and Sonoiki "used a variety of methods to conceal their communications," including coded language in text messages and FaceTime conversations that they did not think would be uncovered, according to authorities. The charging document claims that among their attempts at coded language was a reference to Kendricks' jersey number with the Eagles.

"Yo so the 80 is there," Kendricks texted Sonoiki after initially depositing $80,000 into the new brokerage account used for trading, according to the charges.

"Nah you should keep number 95," Sonoiki replied.

"They said I couldn't get the 80 anyways only WR could get that number," Kendricks answered.

McSwain said court appearances for Kendricks and Sonoiki had not been scheduled as of Wednesday morning but "that will happen relatively shortly." If convicted, he said, both Kendricks and Sonoiki could face "substantial prison time."

Kendricks, 27, signed a one-year contract with the Browns in June and was listed as a backup strongside linebacker in the team's most recent unofficial depth chart. He spent the previous six seasons with the Eagles, starting for the team throughout his tenure. He also helped the team win its first Super Bowl title in franchise history last season.

His younger brother, Eric Kendricks, is a starting middle linebacker for the Minnesota Vikings.