Former Rep. Steve Buyer (R-IN) was indicted in federal court on Monday on criminal insider trading charges as prosecutors claim that he purchased more than $1.5 million worth of shares in two different companies based on nonpublic information he obtained through his consulting work.
At a Monday press conference announcing criminal charges against the former congressman, Damian Williams, the U.S. attorney for the Southern District of New York, accused Buyer of “using his job as a business consultant to obtain inside information about corporate mergers involving his clients and then using that information to trade and to profit in his own account and in other people’s accounts.”
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“Cut it out because we’re watching,” Williams added in a broadside at people engaging in illegal stock trades.
The federal criminal indictment was unveiled alongside a parallel civil case brought by the Securities and Exchange Commission, which filed an insider trading complaint against Buyer in federal court on Monday.
Buyer, who represented Indiana’s 4th Congressional District from 1993 to 2011, is accused of buying stock in Sprint and Navigant Consulting and then selling the shares after news became public that the companies would be acquired by T-Mobile and Guidehouse, respectively. The ex-lawmaker, who founded a consulting firm after leaving public office, counted both T-Mobile and Guidehouse among his clients and was reportedly aware of the impending mergers before they became public knowledge. He profited more than $334,000 in less than two years as a result of the illicit transactions, according to the SEC.
In Congress, Buyer served as chairman of the House Veterans’ Affairs Committee and was one of the House managers in the 1999 impeachment trial of then-President Bill Clinton. Buyer announced in 2010 that he would retire from public office amid an ethics scandal surrounding a sham scholarship fund he operated, which never awarded a scholarship and allegedly only existed to finance luxurious trips in which Buyer could socialize with wealthy donors.
“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, the director of the SEC’s Enforcement Division, said in a Monday statement announcing the agency’s civil complaint against Buyer. “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.”
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Buyer is expected to contest the charges. His attorney, Andrew Goldstein, said on Monday that his client was “innocent” and anticipated “being quickly vindicated.”
Both the federal criminal charges and the SEC complaint against Buyer were filed in the U.S. District Court for the Southern District of New York. Buyer’s indictment was one of nine indictments pertaining to four separate insider trading cases unveiled by the U.S. Attorney’s Office on Monday.
