SEC Charges Former Indiana Congressman Stephen Buyer for Insider Trading

Fazzaco learned that the Securities and Exchange Commission (SEC) has announced insider trading charges against Stephen Buyer, a former U.S. Representative for Indiana's 4th Congressional District. 

​As stated in the SEC's complaint, Buyer created a consulting firm, the Steve Buyer Group, after he left Congress in 2011. The company provided services to, among other clients, T-Mobile. In March 2018, Buyer learned about T-Mobile's nonpublic plan to acquire Sprint from one of the company's executive in a golf outing. The next day, Buyer began purchasing Sprint securities and had acquired $568,000 Sprint common stock in his own personal accounts, a joint account with his cousin, as well as an acquaintance's account before the merger announcement. In April 2018, the merger news leaked out, upon which Buyer gained a profit of more than $107,000 immediately.

In 2019, Buyer purchased over $1 million of Navigant Consulting, Inc. securities before the public announcement that it would be acquired by another one of its consulting clients, Guidehouse LLP, according to the SEC's complaint. Once again the man spread the securities across multiple accounts.  In August 2019, when the company released the news of buying Navigant, Buyer gained a profit of over $227,000 by selling almost all shares he had bought with the various accounts.

Gurbir S. Grewal, Director of the SEC Enforcement Division, commented: "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."

As a result, Buyer was charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in the The SEC's complaint, which seeks disgorgement of ill-gotten gains plus interest, penalties, a permanent injunction, and an officer and director bar against Buyer. Additionally, the complaint seeks disgorgement from Buyer's wife, Joni Lynn Buyer, who profited when Buyer executed unlawful trades in her brokerage account. 

In a parallel action, the U.S. Attorney's Office for the Southern District of New York has filed related criminal charges against Buyer.

Insider trading occurs frequently in the financial field and brings great harm. Most recently, nine individuals including an ex-CISO, investment banker and former FBI trainee were charged with insider trading by SEC. Last week, the regulator charged former Coinbase manager for crypto asset insider trading.