Buyer Beware

A criminal conviction drew an interim suspension of a former Congressman from the Indiana Supreme Court.

The United States Department of Justice for the Southern District of New York had a press release

In 2018 and 2019, BUYER engaged in two separate, but interrelated insider trading schemes to steal material non-public information that he obtained through consulting work and to place timely, profitable securities trades based on that stolen information.  First, in or about March and April 2018, BUYER purchased shares of Sprint Corporation (“Sprint”) ahead of the April 29, 2018, public announcement that T-Mobile US, Inc. (“T-Mobile”) and Sprint would merge in a deal valued at $26.5 billion.  Prior to the public announcement of the transaction by T-Mobile, executives at T-Mobile told a small, trusted group of consultants that they had retained to work on the deal, including BUYER, about the merger and directed them to keep the information confidential.  BUYER breached his duty of confidentiality to T-Mobile and misappropriated that information by purchasing shares of Sprint across several brokerage accounts, including his own accounts, an account held jointly with his cousin, and an account in the name of a close, personal friend.  Across these accounts, BUYER made more than $126,000 from the purchase and subsequent sale of Sprint stock after the merger was publicly announced. 

In or about June through August 2019, BUYER again engaged in insider trading, this time trading in shares of Navigant Consulting, Inc. (“Navigant”) ahead of Navigant’s acquisition by consulting and advisory firm Guidehouse.  As with his purchase of Sprint shares, BUYER learned through his consulting work for Guidehouse that Guidehouse intended to acquire Navigant and misappropriated that information by purchasing Navigant shares ahead of the public announcement of the acquisition.  BUYER purchased Navigant shares across several brokerage accounts, including accounts in his own name, joint accounts held with family members, and the account of the same close, personal friend whose account he used to trade Sprint shares.  In total, Buyer made more than $223,000 from his illegal Navigant trades.

BUYER testified at his March 2023 trial and provided false explanations for his Sprint and Navigant trading, which Judge Berman found at sentencing to constitute obstruction of justice.

(Mike Frisch)