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NEW YORK A former director at Barclays Plc was sentenced on Wednesday to five months in a U.S.
prison for repeatedly passing tips about mergers under way at
the bank to a plumber, who made thousands of dollars trading
ahead of the deals’ announcements.
Steven McClatchey, 58, was also ordered by U.S. District
Judge Katherine Polk Failla in Manhattan to pay a $10,000 fine
and jointly with the plumber forfeit $76,000 after pleading
guilty in July to conspiracy and securities fraud charges.
In court, McClatchey saying he had provided the insider tips
to ingratiate himself with the plumber, Gary Pusey, in hopes of
getting a “simpler, less stressful” job outside of Wall Street
with his 20-employee plumbing business in Long Island.
“I am sincerely sorry for what I have done, and I will feel
a strong sense of remorse for the rest of my life,” McClatchey
The case stemmed from a probe that became an example of a
recent effort by the U.S. Securities and Exchange Commission to
build insider trading cases by culling through billions of rows
of data it has collected to spot unusual trading
The SEC has said the probe began after a unit tasked with
analyzing that data “detected an illicit pattern of trading” by
Gary Pusey, a plumber in New York’s Long Island, who traded
ahead of a series of mergers involving Barclays as an adviser.
After federal prosecutors and the Federal Bureau of
Investigation joined the probe, in December 2015, Pusey began
cooperating with them, providing “detailed information” about
his source, according to court papers.
That source was McClatchey, who according to his lawyers was
an avid recreational sailor who had befriended Pusey at a marina
in Freeport, New York, where they both docked their boats,
spending most Saturdays with him.
Prosecutors said from February 2014 to September 2015,
McClatchey tipped Pusey about more than 10 deals involving
companies that included Entropic Communications Inc and CVS
Health Corp, enabling him to make about $76,000.
While McClatchey said he was hoping for a job with Pusey,
prosecutors said the Barclays employee also received some
financial benefits from Pusey, such as thousands of dollars in
cash and free bathroom renovation services.
Pusey, who pleaded guilty in May to securities fraud and
other charges, has yet to be sentenced. No sentencing date has
The case is U.S. v. Pusey et al, U.S. District Court,
Southern District of New York, No. 16-cr-369.
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