Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7380
    -0.0007 (-0.09%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • Bitcoin CAD

    94,772.25
    -577.25 (-0.61%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.01
    0.00 (0.00%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • CAD/EUR

    0.6839
    -0.0004 (-0.06%)
     

Ex-banker charged with insider trading after giving plumber friend nonpublic info in exchange for bathroom remodel

Steven V. McClatchey, a former Barclays director, is accused of providing nonpublic information for M&A deals involving at least 10 companies to his 'very close friend' Gary J. Pusey, a 47-year-old plumber.

Money on a toilet paper holder. This not a photo from any of the bathrooms mentioned. (Flickr)

A former Barclays investment banker was arrested and charged with insider trading on Tuesday after he allegedly shared non-public information with his plumber buddy in exchange for remodeling his bathroom and gym bags of cash.

Steven V. McClatchey, a 58-year-old resident of Freeport, New York, is accused of providing nonpublic information for M&A deals involving at least 10 companies — including PetSmart, Questcor Pharmaceuticals, and Omnicare — to Gary J. Pusey, a 47-year-old plumber from Mineola, New York, the SEC and the DOJ allege.

The relationship between the investment banker and the plumber began sometime around 2011 or 2012, the civil and criminal complaints said. They first met at the Yachtsmen Cove Marina in Freeport where they both had fishing boats of the same make and model docked next to each other.

Soon after, they became “very close friends” and went fishing together almost every Saturday. During the winter, they would spend Saturdays together playing pool or watching sports in McClatchey’s renovated garage. They also communicated frequently by phone, calling and texting each other at least 500 times between 2013 and 2015.

ADVERTISEMENT

McClatchey worked at Barclays from 2008 until late 2015. As a director reporting to the bank’s global head of M&A, McClatchey was privy to confidential information about upcoming mergers and acquisitions. He also wrote the bank’s M&A Weekly Update newsletter.

From February 2014 until September 2015, McClatchey allegedly shared tips that he learned from his job with Pusey. As a result, Pusey executed a number of profitable trades and made more than $76,000.

In return, Pusey provided free services to remodel McClatchey’s bathroom. He also placed cash in McClatchey’s gym bag and handed it off at the marina or in his garage.

Pusey already pled guilty last week to one count of conspiracy to commit securities fraud and wire fraud, one count of wire fraud, and 11 counts of securities fraud.

McClatchey has been charged with one count of conspiracy to commit securities and wire fraud, one count of wire fraud, and 11 counts of securities fraud.

In a statement, Barclays said that it cooperated fully with the SEC, DOJ, and FBI investigations.

"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."

Julia La Roche is a finance reporter at Yahoo Finance.

Read more:

The real-life hero of 'The Big Short' dumped a bunch of bank stocks

Raoul Pal: The stock market is behaving the way it did back in 2000

We just got a sign that business is bouncing back on Wall Street

Hedge fund titans warn of financial crisis-like market signals

Billionaire Rubenstein: These 6 traits will help you succeed on Wall Street