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SEC Brings Insider Trading Charges Against Former Indiana Congressman

Ruth Singleton
Published Date:
Jul 26, 2022


The Securities and Exchange Commission (SEC) filed insider trading charges yesterday against Stephen Buyer, a former U.S. Representative for Indiana's 4th Congressional District. 

According to the SEC’s complaint, filed in federal district court in Manhattan, Buyer formed a consulting company after leaving Congress in 2011, and used nonpublic information that he gained from clients to buy $1.5 million in stocks and make a profit of more than $300,000. 

Specifically, in March 2018, Buyer went to a golf outing with a T-Mobile executive, when T-Mobile was a client. He learned from the executive about the company’s then nonpublic plan to acquire Sprint. Buyer began purchasing Sprint securities the next day, and, ahead of the merger announcement, he 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. After news of the merger leaked in April 2018, Buyer saw an immediate profit of more than $107,000. 

Thenin 2019, Buyer bought more than $1 million of Navigant Consulting, Inc. securities ahead of the public announcement that it would be acquired by another one of Buyer’s consulting clients, Guidehouse LLP. As before, Buyer spread the purchases across several accounts. This time, they 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. According to the SEC complaint, in August 2019, on the day that the Navigant acquisition was publicly announced, Buyer sold nearly all of the shares he had acquired across the various accounts and profited more than $227,000. 

Also according to the SEC complaint, Buyer took steps to conceal his trading activity in addition to using multiple accounts. It alleges that he printed a public investment research document from Zacks Investment Research showing Sprint stock trades by insiders. Buyer then made handwritten notes on the document to give the false impression that his trading was based on information from the Zacks document, rather than from material nonpublic information. 

The SEC's complaint charges Buyer with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It seeks disgorgement of 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. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced related criminal charges.

Gurbir S. Grewal, director of the SEC 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." 

According to the Washington Post, Buyer, a Republican represented Indiana’s 4th and 5th districts from 1993 to 2011. Before his departure, according to news reports, he faced questions about his private scholarship foundation, which had raised more than $880,000 without awarding any scholarships. He has defended his handling of the organization. 

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