Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Saturday, June 15, 2024 | Back issues
Courthouse News Service Courthouse News Service

Former GOP congressman arrested for insider trading

Ex-Republican Congressman Stephen Buyer is accused of making $350,000 through inside tips from corporate consulting clients.

MANHATTAN (CN) — Former Indiana Congressman Stephen Buyer was indicted for insider trading on Monday, alongside eight other defendants facing federal financial fraud counts in New York.

“We are keenly interested in sending a message that insider trading is still around, we’re still around and when we find it, we’re going to bring cases,” U.S. Attorney Damian Williams for the Southern District of New York told reporters at a Monday press conference where he announced the unsealing of four indictments against nine defendants charged with insider trading finance crimes.

“When insider trading occurs, investors who play by the rules are left to conclude that the deck is stacked against them,” he continued. “The cases that we unsealed demonstrated our commitment to fighting that perception, and it should send a strong message to anyone that is even thinking about committing insider trading — cut it out, because we’re watching.”

All nine defendants are in custody, Williams told reporters on Monday, noting that one was allowed to self-surrender.

The indictment against former Representative Buyer, 63, says he netted about $350,000 in illegal gains after misappropriating confidential information about corporate mergers involving his private consulting clients.

During his stint in Congress from 1993 through 2011, Buyer represented parts of central Indiana and served on committees with oversight over the telecommunications industry.

Court papers say he leveraged his later work as a consultant and lobbyist to make illegal profits. Buyer is accused of engaging in insider trading during the $26.5 billion merger of T-Mobile and Sprint, among other deals.

Buyer's attorney Andrew Goldstein said his client is innocent. "His stock trades were lawful," Goldstein, a partner at Cooley, said on Monday afternoon. "He looks forward to being quickly vindicated."

The Securities and Exchange Commission filed parallel civil complaints Monday against Buyer and the nine other defendants. The SEC case against Buyer says he made purchases of Sprint securities in March 2018, just a day after attending a golf outing with a T-Mobile executive who told him about the company’s then nonpublic plan to acquire Sprint.

Securities regulators seek disgorgement of ill-gotten gains plus interest, penalties, a permanent injunction, and an officer and director bar against Buyer, as well as disgorgement from Buyer's wife, Joni Lynn Buyer, who profited when Buyer executed unlawful trades in her brokerage account.

"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," Gurbir Grewal, director of the SEC Enforcement Division, said in a statement on Monday. "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."

Three executives at Silicon Valley technology companies — Amit Bhardwaj, Srinivasa Kakkera and Abbas Saeedi — were charged Monday by both the SEC and the Department of Justice with trading on inside information about corporate mergers that one of them learned about from his employer.

Prosecutors and regulators allege Bhardwaj, the former chief information security officer of Lumentum Holdings Inc., and his friends, Kakkera and Seedi, traded ahead of two corporate acquisition announcements by Lumentum, thereby generating more than $5.2 million in illicit profits, from nonpublic information Bhardwaj learned about the company’s plans to first acquire Coherent Inc. and later acquire NeoPhotonics Corp.

Seth Markin, a man who was training to be an FBI agent, was charged alongside his friend, Brandon Wong, with making more than $1.4 million in illegal profits based on a tip that Merck & Co. was going to acquire Pandion Therapeutics. Prosecutors say Markin stole the inside information from a woman he was dating at the time who was working at a major Washington, D.C., law firm. Markin and Wong also face SEC charges.

The fourth indictment and SEC complaint says Birjesh Goel, an investment banker based in New York, shared secrets about potential mergers with another individual on the understanding that the pair would share illegal profits of about $280,000.

U.S. Attorney Williams has been in his post since the Senate confirmed the Biden nominee last fall. Six months into the job, Williams announced securities fraud and racketeering charges against Archegos founder Sung Kook “Bill” Hwang and chief financial officer Patrick Halligan. This came a little over a year after the implosion of Hwang’s company caused billions of dollars of losses on Wall Street.

Follow @jruss_jruss
Categories / Business, Criminal, Government, Securities

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.