Steven McClatchey, a former Barclays PLC (ADR) (NYSE:BCS) director will have to defend himself in court over alleged wire and securities fraud. Authorities allege that the former director supplied Gary Pusey with valuable insider information that helped him make $76,000 in trading profits.
Prosecutors allege that. McClatchey fed Mr. Pusey insider information related to upcoming mergers before they were made public. Some of the deals involved those of PetSmart, CVS Health Corp (NYSE:CVS), and Duke Energy Corp (NYSE:DUK). According to the SEC, the two began communicating in 2013, contacting each other at least 500 times by telephone or text message.
In one occasion, Mr. Pusey bought PetSmart stock worth $56,000 and ended up making more than $6,000 in profit. This is after Mr. McClatchey had provided him with information about a potential acquisition by the Phoenix-based retailer that was in the works.
Mr. Pusey, a plumber, has already pleaded guilty to the charges. He has also stated that he repaid the former Barclays director by renovating his bathroom on the south shore of Long Island. Some of the payments were made to the former Barclays director at his home garage or during boat rides.
Mr. McClatchey, who worked at Barclays’ London offices from 2008 until 2015, did not interact with customers directly. His job involved the collection of information and material related to mergers and acquisitions that the bank oversaw on behalf of its clients. He also created PowerPoint Presentations related to mergers and acquisitions, which were in turn distributed to senior members of the investment banking division.
Barclays has already echoed its support to the ongoing investigations reiterating that it has wholly c-operated with the SEC and the FBI.
“Barclays will take appropriate action when employees do not hold themselves to the conduct and control standards which are embedded in our culture,” a representative for Barclays said in a statement.