Good Morning
Good Morning
Long IslandCrime

LI investment banker charged with insider trading, feds say

Steven McClatchey exits a federal courthouse in Manhattan

Steven McClatchey exits a federal courthouse in Manhattan after being arraigned on Tuesday, May 31, 2016. McClatchey 58, of Freeport, was charged with insider trading for sharing tips and profits with a plumber he met at the Yachtsmen's Cove marina in Freeport, where they both docked their boats. Credit: Charles Eckert

An investment bank director from Long Island was charged Tuesday with leaking stock tips to a plumber he met at the Yachtsmen’s Cove marina in Freeport and sharing the profits in a new Manhattan federal court insider trading case.

Steven McClatchey, 58, of Freeport, was identified in both the criminal complaint and a Securities and Exchange Commission suit as a director in the Manhattan office of a “global bank” based in London. The bank wasn’t named, but Barclays Investment Bank said in a statement it was cooperating.

McClatchey allegedly learned about imminent mergers and acquisitions at his job before they were publicly announced, and beginning in 2014 passed along at least 10 tips to plumber Gary Pusey, 47, of Mineola, who is cooperating with authorities, according to the government filings.

The complaints said McClatchey and Pusey met at the Freeport marina where they had adjacent slips in 2011 or 2012, and by 2013 had become fishing buddies, hanging out on each other’s boats in the summer, and playing pool and watching sports together in the winter.

The plumber allegedly traded in his own brokerage account on McClatchey’s tips, and repaid him with home renovation services — including a bathroom remodel — and a share of profits, delivering cash in a gym bag at the marina, or in McClatchey’s garage.

The trades, mostly purchases of less than $100,000 in stock that rose after merger activity became public, included shares of PetSmart, Pepco, Questcor Pharmaceuticals and Omnicare, among other stocks.

After public announcements, share prices of the stocks rose from just under 2 percent to over 32 percent, the government said, with total profits of $76,000.

McClatchey worked at the investment bank until December 2015, the government said. Arrested early Tuesday, he was released on his own recognizance after a brief court appearance. He and lawyer Steven Kartagener declined to comment.

Barclays said in its statement: “Barclays wholly supports the Southern District of New York, the SEC and the FBI in their respective investigations, and has cooperated fully with them since learning about this incident involving a former employee.”

McClatchey faces a maximum term of 320 years in prison for conspiracy, wire fraud and securities fraud. Pusey pleaded guilty to the same three charges in a sealed proceeding last week.

Latest Long Island News