The Securities and Exchange Commission's decision to charge footballer Mychal Kendricks and an analyst who worked at an investment bank called Damilare Sonoiki is a cautionary tale of the mischief that can transpire when a HNW individual meets someone at a bank with access to confidential, non-public information.

The regulator has charged the pair with insider trading in advance of corporate acquisitions which they allegedly arranged through coded text messages and FaceTime conversations.

The SEC claims that, after meeting at a party, Mychal Kendricks began receiving illegal tips from Damilare Sonoiki, an analyst at an investment bank who had access to confidential, non-public information about upcoming corporate mergers. Kendricks allegedly made US$1.2 million in illegal profits by purchasing securities in companies that were soon to be acquired and then selling his stakes after the deals were publicly announced, in one instance almost making a 400% return on his investment in just two weeks.

According to the SEC’s complaint, Kendricks rewarded Sonoiki for his tips and other assistance, which included setting up an online brokerage account that both men could access, by providing cash kickbacks, free National Football League tickets and an evening on the set of a pop star’s music video in which Kendricks made a cameo appearance.

The complaint therefore alleges that Kendricks paid cash and shared celebrity perks for illegal tips. He and Sonoiki allegedly tried to evade detection by using a variety of communication methods to hide their misconduct, but the SEC's investigators pieced everything together.

The SEC’s complaint, filed in federal district court in Philadelphia, charges Kendricks and Sonoiki with fraud and is seeking the return of their ill-gotten trading profits plus interest and penalties. Parallel criminal charges are being levelled against the pair.

The investigation continues.