NEW YORK (AP) – A former U.S. congressman from Indiana, tech company executives, a man in training to be an FBI agent and an investment banker were among the nine people charged of four separate and unrelated insider trading schemes that were disclosed in the unsealing of indictments in New York City on Monday.
It was one of the most significant law enforcement crackdowns on insider trading in a decade, and a prosecutor and other federal officials pledged renewed enthusiasm for similar prosecutions in the future. They said the deception resulted in millions of dollars in illegal profits for defendants located on both coasts and in central America.
U.S. Attorney Damian Williams said at a news conference that the cases, along with other recently announced crackdowns on insider trading, represent a follow-up to his promise to be “relentless in eliminating the crime in our financial markets.”
“We have zero tolerance, zero tolerance for cheating in our markets,” said Gurbir S. Grewal, director of the SEC’s division of enforcement.
An indictment identified Stephen Buyer as someone who misappropriated secrets he learned as a consultant to illegally earn $350,000. Buyer served on committees with oversight of the telecommunications industry while a Republican congressman from 1993 to 2011, according to the indictment.
Buyer, arrested Monday in Indiana, was accused in court documents of engaging in insider trading during a merger of T-Mobile and Sprint, among other deals. Documents said he used 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 trades were lawful. He is eager to be vindicated quickly.”
In a civil lawsuit filed by the Securities and Exchange Commission in Manhattan federal court against Buyer, he was described as buying Sprint stock in March 2018 just one day after attending a golf outing with an executive from T-Mobile 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 not only violate federal securities laws, they also undermine the trust and public confidence in the fairness of our markets,” Grewal said.
He told the press conference that the arrests were not only intended to send a signal to financial industry professionals to protect secrets and follow the law, but were also intended “to send an equally strong message to investing public” that regulators and law enforcement were. focusing on keeping markets clean.
In a second prosecution, three Silicon Valley tech executives were accused of insider trading on corporate mergers that one of them learned about from his employer.
In a third case, a man who was training to be an FBI agent allegedly stole inside information from his then-girlfriend who worked at a major law firm in Washington, DC. According to court documents, he and a friend made more than $1.4 million in illegal profits after learning that Merck & Co. was going to acquire Pandion Therapeutics.
In a fourth indictment, a New York-based investment banker was accused of sharing secrets about potential mergers with another with the understanding that the pair would share in illegal profits of about $280,000.