A former investment banker from Freeport was sentenced to five months in federal prison Wednesday for leaking insider tips to a plumber after claiming he did it to curry favor in hopes of escaping his high-pressure job and joining the plumbing business.
Steven McClatchey, 58, told Manhattan U.S. District Judge Katherine Failla that he became a fishing buddy with plumber Gary Pusey at the Freeport marina, where both moored their boats, and longed for a “simpler life” by taking over administration at Pusey’s 20-employee business.
“I saw a possibility to seek a role,” said McClatchey, who had become a director earning nearly $300,000 annually after working 35 years at Barclays PLC. “I got involved for a selfish, stupid reason — to get an easier job for myself.”
With his life now in tatters, McClatchey said, his burned-out view of the 24-hours-on-call life he once lived had changed.
“I would give anything now to have to get up at 5:30 a.m. to go in to work,” he said. “At this point, all the stress and pressure doesn’t seem so bad to me anymore.”
McClatchey pleaded guilty in July to conspiracy and securities fraud charges. He was accused of passing at least 10 tips over 19 months on upcoming corporate deals to Pusey, 47, of Mineola, while the two were palling around on their boats, watching sports or playing pool on weekends.
McClatchey’s job at Barclays included tracking merger and acquisition deals. Pusey made $75,000 from illegal trading in stocks like PetSmart and Omnicare, and provided McClatchey with a small portion — “several thousand dollars,” the government said.
Pusey pleaded guilty and agreed to cooperate with the government. He has not yet been sentenced.
McClatchey’s plea for a sentence of home confinement — supported by the court’s probation department and a circle of friends and supporters who wrote to Failla — was countered by prosecutor Rebecca Mermelstein, who urged a sentence of 10 to 16 months.
She said that despite his paltry financial gain, McClatchey offered the tips to make himself a big man in the eyes of his plumber friend.
“He did it to show off,” Mermelstein said before urging the judge to impose jail time as a message to Wall Street.
In addition to five months in prison, Failla said McClatchey would be on probation for two years and ordered him to pay a $10,000 fine and forfeit $76,000.
She wondered why McClatchey kept providing tips for more than a year without asking Pusey for a job if his real motive was to find a simpler lifestyle. Failla also said incarcerating McClatchey would help deter other small-scale insider trading schemes.
“This was a period of 19 months with more than ten stocks, not insignificant gains and just this extraordinary breach of trust,” the judge said. “I do think some sentence of imprisonment is necessary.”