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Ex-American congressman among 9 accused in cases of insider trading

NEW YORK (AP) – A former U.S. congressman from Indiana, technology company executives, a man who trained as an FBI agent and an investment banker were among nine people charged in four separate and unrelated insider trading schemes that were revealed Monday with the repeal of the sealing of indictments in New York City.

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 cheating resulted in millions of dollars in illegal profits for defendants located on both coasts and in Central America.

U.S. Attorney Damian Williams told a news conference that the cases, along with several other recently announced crackdowns on insider trading, represent a follow-up to his pledge to be “relentless in rooting out crime in our financial markets.”[ads1];

“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 make $350,000 illegally. Buyer served on committees with oversight of the telecommunications industry while a Republican congressman from 1993 to 2011, the indictment states.

Buyer, arrested Monday in Indiana, was accused in court papers of engaging in insider trading during a merger of T-Mobile and Sprint, among other deals. Documents said he leveraged his work as a consultant and lobbyist to make illegal profits.

His lawyer, Andrew Goldstein, said in a statement: “Congressman Buyer is innocent. His stock trading was legal. He looks forward to being confirmed quickly.”

In a civil suit filed by the Securities and Exchange Commission in Manhattan federal court against Buyer, he was described as having purchased Sprint securities in March 2018 just one day after attending a golf outing with a T-Mobile executive who told him about the company’s then-unpublic plan to buy Sprint.

“When insiders like Buyer – an attorney, a former prosecutor and a retired congressman – profit from the access to material, non-public information, as alleged in this case, they not only violate the federal securities laws, but also undermine public trust and confidence to the fairness of our markets,” Grewal said.

He told the news 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 investors” that regulators and law enforcement were focused on keeping markets clean.

In a second prosecution, three executives at Silicon Valley technology companies were charged with trading on inside information about corporate mergers that one of them learned about from his employer.

In a third case, a man who trained as an FBI agent is said to have stolen inside information from his then-girlfriend who worked at a large law firm in Washington DC. According to court papers, he and a friend made more than $1.4 million in illegal profits after learning that Merck & Co. was going to buy Pandion Therapeutics.

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

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