Ex-Barclays banker accused by US of illegal tips to plumber

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Published: May 31, 2016 9:43:16 PM

A former director of Barclays Plc was arrested on Tuesday on U.S. charges that he provided inside information about impending mergers that he learned about at the bank to a plumber, who use the tips to illegally make $76,000.

A former director of Barclays Plc was arrested on Tuesday on U.S. charges that he provided inside information about impending mergers that he learned about at the bank to a plumber, who use the tips to illegally make $76,000.

Steven McClatchey, 58, was charged in a criminal complaint filed in Manhattan federal court with conspiracy, wire fraud and securities fraud after the unnamed plumber secretly pleaded guilty last week and agreed to cooperate with authorities.

A lawyer for McClatchey could not be immediately identified. McClatchey was arrested in Long Island, according to a spokesman for Manhattan U.S. Attorney Preet Bharara, and was expected to appear in court later in the day.

According to the complaint, McClatchey began tipping the Long Island-based plumber, a friend, in 2013, enabling him to execute trades ahead of merger announcements involving 11 companies, including Forrest Oil Corp and PetSmart Inc.

In exchange, the plumber made thousands of cash payments to McClatchey, in some instances placing cash in a gym bag that the banker brought with him to a marina in Long Island, and also provided home renovation services.

While Barclays was not identified by name in court papers, a bank spokeswoman confirmed it was the British investment bank that had employed McClatchey, who court papers said worked in its Manhattan offices from December 2008 to December 2015.

In a statement, Barclays said it has cooperated fully with authorities, including the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission “since learning about this incident involving a former employee.”

The case is U.S. v. McClatchey, U.S. District Court, Southern District of New York, 16-mj-3433.

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