Rensselaer native and Valparaiso University Law School graduate who represented parts of Northwest Indiana in Congress from 1993 to 2011 was charged with insider trading and securities fraud Monday by federal law enforcement authorities.
Former U.S. Rep. Steve Buyer, a 63-year-old Republican now living in Noblesville, is accused by the U.S. Securities and Exchange Commission of using nonpublic information to buy more than $1.5 million in stocks that immediately jumped in value.
Specifically, the SEC alleges in March 2018 Buyer learned through his consulting business of T-Mobile's planned merger with Sprint about a month before details about the combining of the two mobile phone companies were publicly available.
Buyer began purchasing Sprint securities the next day and ultimately acquired a total of $568,000 of Sprint common stock in his own personal accounts, a joint account with his cousin and an acquaintance's account, according to the SEC.
After news of the merger leaked in April 2018, Buyer saw an immediate profit of more than $107,000, the SEC said.
According to the SEC, Buyer also purchased $1 million in Navigant Consulting, Inc. securities ahead of the public announcement it would be acquired by a Buyer consulting client, Guidehouse LLP.
Buyer again spread the purchases across several accounts, including his own accounts, joint accounts with his wife and son, his wife’s personal account and the same acquaintance’s account involved in the Sprint trading, the SEC claimed.
Then, on the day that the Navigant acquisition was publicly announced in August 2019, Buyer sold nearly all the shares he'd acquired across the various accounts and profited more than $227,000, according to the SEC.
"When insiders like Buyer — an attorney, a former prosecutor, and a retired congressman — monetize their access to material, nonpublic information, as alleged in this case, they not only violate the federal securities laws, but also undermine public trust and confidence in the fairness of our markets," said Gurbir Grewal, director of the SEC Enforcement Division.
"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."
The SEC's complaint, filed at the federal district court in New York City, seeks disgorgement of Buyer's ill-gotten gains plus interest, penalties, a permanent injunction and an officer and director bar against Buyer. The complaint also seeks disgorgement from Buyer's wife, Joni Lynn Buyer, who profited when Buyer executed unlawful trades in her brokerage account.
The U.S. Attorney’s Office for the Southern District of New York separately charged Buyer with four counts of securities fraud in connection with his alleged insider trading. Each securities fraud count carries a potential term of 20 years in prison.
"The message of today’s arrests is simple: My office remains as committed as ever to rooting out insider trading in all forms. Insider trading erodes the trust and confidence of the investing public in our capital markets. We will continue to investigate and prosecute those who cheat in the markets by using insider information to line their own pockets," said U.S. Attorney Damian Williams.
Buyer's attorney, Andrew Goldstein, said in a statement: "Congressman Buyer is innocent. His stock trades were lawful. He looks forward to being quickly vindicated."
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