Former Congressman, consultant Stephen Buyer charged with insider trading

Stephen Buyer, a management consultant and former GOP Congressman, has been charged with insider trading by the Securities and Exchange Commission for alleged illegal trades he made based on material non-public information obtained from his consulting work. In parallel to the SEC’s civil suit, Buyer was arrested on Monday and faces four counts of securities fraud in the US Southern District of New York.

Federal prosecutors allege Buyer – who represented Indiana’s 4th and 5th districts from 1993 to 2011 – used stolen material non-public information from his consulting work to place timely securities trades resulting in more than $300,000 in illegal profits.

After leaving Congress in 2011, Buyer launched his own lobbying and consulting firm, Steve Buyer Group.

In or about March and April 2018, Buyer purchased shares of Sprint ahead of the April 29, 2018 public announcement of its merger with T-Mobile. Prior to the public announcement, T-Mobile told a group of consultants retained to work on the deal – including Buyer – about the merger, according to federal prosecutors. Buyer allegedly made more than $126,000 from the purchase and subsequent sale of Sprint stock after the merger’s public announcement.

In or about June through August 2019, Buyer traded in shares of Navigant Consulting ahead of its acquisition by Guidehouse, netting illegal profits of more than $223,000, the US Attorney’s Office of the Southern District of New York said. Buyer allegedly determined through his consulting work for Guidehouse that the company intended to acquire Navigant and made stock purchases ahead of the public announcement.

The federal court’s four counts of securities fraud against Buyer each carry a maximum term of 20 years in prison. The SEC’s civil suit seeks the return of $335,000 in illegal profits (plus interest and penalties) and a ban on Buyer serving as an officer and director of a company.

“His stock trades were lawful. He looks forward to being quickly vindicated,” Buyer’s attorney Andrew Goldstein told The Washington Post.

Federal prosecutors on Monday also charged eight other individuals for insider trading, including an investment banker and a former FBI agent trainee.

“Insider trading erodes the trust and confidence of the investing public in our capital markets,” said US Attorney Damian Williams. “We will continue to investigate and prosecute those who cheat in the markets by using insider information to line their own pockets.”

Gurbir Grewal, director of the SEC’s enforcement division, said, “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. 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."