Former US congressman among 9 indicted in insider trading cases

NEW YORK (AP) — A former U.S. congressman from Indiana, tech company executives, a man in training to become an FBI agent and an investment banker were among nine people charged in four misdemeanor schemes separate and unrelated insider tips disclosed Monday with the unsealing of indictments in New York.

It was one of the largest law enforcement attacks on insider trading in a decade, and a prosecutor and other federal officials have promised new enthusiasm for similar prosecutions at the coming. They said the cheating resulted in millions of dollars in illegal profits for the defendants located on both coasts and in Central America.

U.S. Attorney Damian Williams told a press conference that the cases, in addition to several other recently announced crackdowns on insider trading, represent a follow-up to his promise to be “relentless in the eradication of crime in our financial markets”.

“We have zero tolerance, zero tolerance for cheating in our markets,” said Gurbir S. Grewal, director of the SEC Enforcement Division.

An indictment identified Stephen Buyer as someone who misused secrets he learned as a consultant to illegally earn $350,000. The buyer served on telecommunications industry oversight committees while a Republican congressman from 1993 to 2011, the indictment said.

The buyer, arrested Monday in Indiana, was accused in court papers of engaging in insider trading in a merger between T-Mobile and Sprint, among other transactions. Documents indicate that he leveraged his work as a consultant and lobbyist to make illegal profits.

His attorney, Andrew Goldstein, said in a statement, “Congressman Buyer is innocent. His stock transactions were legal. He waits impatiently to be exonerated quickly.

In a civil case brought by the Securities and Exchange Commission in Manhattan federal court against the buyer, he was described as making purchases of Sprint stock in March 2018 just a day after attending a golf outing with a T-Mobile executive who told him about the company. then non-public plan to acquire Sprint.

“When insiders like Buyer — an attorney, former prosecutor, and retired congressman — monetize their access to material, nonpublic information, as alleged in this case, they are not only violating federal securities laws , but also undermine public confidence in the fairness of our markets,” Grewal said.

He told the press conference that the arrests were not only meant to send a signal to professionals in the financial industry to protect secrets and obey the law, but were also “meant to send an equally loud to the investing public” that regulators and law enforcement were focused on keeping the markets clean.

In a second lawsuit, three Silicon Valley tech executives were accused of exchanging inside information about corporate mergers one of them was told about by his employer.

In a third case, a man training to become an FBI agent allegedly stole inside information from his then-girlfriend who worked at a major Washington DC law firm. According to court documents, he and a friend made more than $1.4 million in illegal profits after learning that Merck & Co. was to acquire Pandion Therapeutics.

In a fourth indictment, a New York-based investment banker was accused of sharing secrets about potential mergers with another on the understanding that the pair would share illegal profits of around $280,000.

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