Former Congressman Stephen Buyer criminally profited from his access to power and confidential information, a federal prosecutor told jurors in the first of a batch of New York insider trading cases to reach trial.
(Bloomberg) — Former Congressman Stephen Buyer criminally profited from his access to power and confidential information, a federal prosecutor told jurors in the first of a batch of New York insider trading cases to reach trial.
“You can make a lot of money in the stock market if you know what is going to happen before it happens,” Assistant US Attorney Margaret Graham told the jury during opening statements in Buyer’s trial on Wednesday. “He abused that trust and used his clients’ information to trade in the stock market not once but twice.”
Buyer spent more than a decade in Congress as a Republican representative for Indiana, serving as a prosecutor during Bill Clinton’s impeachment trial and gaining fame for comparing smoking tobacco to smoking lettuce while opposing the legislation that gave the US Food and Drug Administration regulatory authority over the industry.
In the 12 years since he left office, Buyer built a consulting business, mostly focused on industries in which he gained expertise during his days in Congress — telecommunications and defense. It was this business, federal prosecutors say, that enabled him to learn about two pending mergers and make hundreds of thousands of dollars trading on the information.
Buyer’s case is the first to reach a jury out of a raft of insider trading prosecutions announced simultaneously by Manhattan US Attorney Damian Williams last summer. While the cases are unrelated, the charges show that Williams is cracking down on insider trading even as prosecutions of white collar crime in the US have plunged to an all-time low.
Buyer, 63, of Noblesville, Indiana, is accused of making more than $349,000 by trading on confidential information he learned about two potential mergers during the course of his consulting work — T-Mobile US Inc.’s 2018 purchase of Sprint Corp. and Guidehouse’s 2019 acquisition of Navigant Consulting Inc.
Prosecutors say Buyer learned of the plan to acquire Sprint while playing golf with a government affairs executive at T-Mobile in Miami in March 2018, and found out about the Navigant deal through a conversation with a Guidehouse salesperson while working as a consultant in June 2019.
Buyer has maintained that he never traded on confidential information that wasn’t available to the public and that the government is trying to “piece together otherwise innocuous facts to try to make a circumstantial case” that the former congressman traded on material, nonpublic information.
In his own opening, Buyer’s lawyer Daniel Alonso compared prosecutors to a gold prospector who is so eager to find the precious metal that he paints rocks yellow and believes he has struck it rich.
“No matter how many crumbs you put onto a plate and push them together, it will never be a cake,” Alonso told the jury. “No matter how bright the yellow cake is, it will never be gold.”
The case is US v. Buyer, 22-cr-397, US District Court, Southern District of New York (Manhattan).
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