Former congressman charged with insider trading
The Securities and Exchange Commission (SEC) on Monday charged former Rep. Stephen Buyer (R-Ind.) with insider trading, including purchasing stocks based on nonpublic information.
The SEC filed the insider trading charge in a Manhattan federal district court, accusing Buyer of making illegal stock purchases in at least two instances, according to an agency press release. The SEC is seeking to force Buyer to disgorge profits he made from the alleged schemes.
The charges were brought as part of an investigation into Buyer and nine other defendants, who were also charged on Monday with insider trading schemes.
The U.S. Attorney’s Office for the Southern District of New York on Monday filed criminal charges in a parallel case against nine defendants, including Buyer.
SEC Enforcement Division Director Gurbir Grewal said those who monetize nonpublic information not only violate federal law but “undermine public trust and confidence in the fairness of our markets.”
“We are committed to doing all we can to maintain and enhance public trust by leveling the playing field and holding Buyer accountable for illegally profiting from his access,” Grewal said in a statement.
Buyer, who served in Congress from 1993 to 2011, founded his own consulting group called the Steve Buyer Group shortly after leaving public office.
The former congressman is accused of acquiring $568,000 in Sprint shares after he learned through nonpublic channels in March 2018 that T-Mobile was planning to merge with the then-rival telecommunications company. T-Mobile was a client of Steve Buyer Group.
Buyer immediately pocketed more than $107,000 via the stock exchange after news of the merger leaked in April 2018, the SEC said.
In another instance, the SEC says Buyer purchased more than $1 million in shares in Navigant Consulting ahead of an announcement that one of his clients, Guidehouse LLP, would purchase the firm.
He allegedly spread purchases of the shares across several accounts, including ones belonging to his wife and son.
Buyer then sold his shares for a $227,000 profit the day the Guidehouse-Navigent merger was announced, the SEC charges.
At a press conference on Monday, the U.S. Attorney’s Office in New York’s Southern District announced the criminal charges filed against Buyer and eight other defendants, including a former FBI agent trainee and an investment banker, were part of broad effort to crack down on financial fraud.
At the press conference, U.S. Attorney Damian Williams said he assumed office last year to “be relentless in rooting out corruption in our financial markets.”
“Nearly one year later, those priorities have not changed one bit,” Williams said.