5 ms·

Ex-congressman convicted of insider trading before T-Mobile merger with Sprint

98 points by perihelions 3y ago

toomuchtodo 3y ago
https://www.justice.gov/usao-sdny/pr/former-congressman-sentenced-22-months-prison-insider-trading https://www.justice.gov/usao-sdny/pr/former-congressman-sent... https://en.wikipedia.org/wiki/Steve_Buyer https://en.wikipedia.org/wiki/Steve_Buyer
- kube-system 3y ago
  I love the nominative determinism. He was an early buyer.
colechristensen 3y ago
This isn’t as interesting as the headline makes it seem. He had not been in Congress a years when the insider trading took place.
- fatfingerd 3y ago
  Looks like he stepped down to stop investigations into the Frontier Foundation, a scam NGO for nepotism and transfers of wealth?
  - asoneth 3y ago
    > a scam NGO for nepotism and transfers of wealth I thought you might be exaggerating, but if the wikipedia entry is to believed it seems like a pretty obvious case of laundering bribes: "In 2003, Buyer created The Frontier Foundation, whose stated purpose is educational funding for college students ... Buyer's daughter Colleen was the president ... His son Ryan, in 2009, was director ... the foundation shared an office with Buyer's campaign office ... annual fundraising golf outings had raised more than $880,000 for the foundation. Almost all the contributions were from 20 companies and trade organizations that had interests before the House Energy and Commerce Committee, of which Buyer is a member ... In 2018, the Frontier Foundation was closed by Buyer, the only listed officer, without ever having funded a scholarship." Excerpts from: https://en.wikipedia.org/wiki/Steve_Buyer#Frontier_Foundation https://en.wikipedia.org/wiki/Steve_Buyer#Frontier_Foundatio...
    - fatfingerd 3y ago
      He seems to have played all the important roles for violating lobbying ethics, and probably wasn't consulting at a tobacco and then telco company out of coincidence, either his presence or his purpose would have been a facilitation of laundering. 22 months is embarrassing, that no other agency could put him away first is even more embarrassing.
  - infamouscow 3y ago
    > scam NGO The word "scam" is a redundant modifier for an NGO :)
- chews 3y ago
  Funny enough had he been in Congress he’d be in the clear.
  - simplicio 3y ago
    Why? Chris Collins was convicted of insider trading while in congress just a few years ago. I don't think there's any special protections for Congress-folk from insider trading laws.
    - edgyquant 3y ago
      It’s just a talking point people like to parrot
alwaysrunning 3y ago
Ah, the things you get to hear as a consultant.
olliej 3y ago
He was not a congressman at the time he did this. It's absurd that if he made use of the same secret information but while employed as a congressman (even if he was overseeing the merger) would mean he was fine.
- kasey_junk 3y ago
  This is a weird myth that has been debunked repeatedly: https://www.everycrsreport.com/files/20170412_RS21127_36174d2b18e501200b69074ce8f237e5d2832b15.pdf https://www.everycrsreport.com/files/20170412_RS21127_36174d... Congress people and their staff are not immune from insider trading rules and in fact there is an explicit law saying so.
  - pseg134 3y ago
    Sure, but they are not considered “insiders” when trading on non public information obtained during their official duties. So sure, if his wife told him about her company’s merger he could go to jail. You are either ignorant or willfully misleading people.
    - kasey_junk 3y ago
      Lots of people aren’t considered insiders when trading on non public information obtained during their official duties. Congress people aren’t held to a different standard here. If you want to argue that they should be held to a higher standard that’s reasonable but the way the comment was worded suggested there is some extra immunity for Congress. Which there isn’t.
      - fsckboy 3y ago
        well then, you are either educated/intelligent, or thoughtfully trying not to mislead people! which one is it, buddy!? what is the definition of non-public information in the context of congress and corporate "inside" information? If the congressional subcommittees get briefed on the Covid crisis or trade laws or policy, they might have advance knowledge that companies themselves don't have. Or if a company insider reveals information to subcommittees, is that actually making the information public?
Racing0461 3y ago
what about "current congressman"?
- mc32 3y ago
  Of course, they are allowed[1], why would they be bound by the laws that govern the governed? [1]https://blogs.luc.edu/compliance/?p=4459 https://blogs.luc.edu/compliance/?p=4459
jeffbee 3y ago
Amazing how much risk a person will accept for only $300k in profits. Guy was an attorney and ex-Congressman who could have scared up that amount of money in no time.
- pcurve 3y ago
  Maybe he thought the small amount would let him fly under the radar.
- tester756 3y ago
  >who could have scared up that amount of money in no time. What makes you think so?
  - diogenes4 3y ago
    For one example, see Barney Frank, co-author of the Dodd-Frank act. After retiring from congress he found himself with a board role on Signature Bank. Over the seven years he "worked" there he accumulated around $1M in salary + equity. Or for another example, see the Hunter Biden/Burisma story. I think the media coverage of this is mostly partisan quackery, but it's a useful illustration here as to how you can make a good deal of money just being vaguely associated with american politicians. Hunter is certainly not unusual in this regard.
    - deleted 3y ago
      [deleted]
atdrummond 3y ago
This is a frustrating title. While it is technically true, it elides some important information and context: - He had been out of Congress for over 8 years at the time of the Sprint/T-Mobile merger. - He made considerably larger gains (2x, $100k more nominally) on his Navigant insider trade. - None of his insider trading was related to either Congress directly or congressional info on the named merger, as one might infer from the title. Why not “Former Rep. Turned Consultant Illegally Traded On Client Info From T-Mobile And Navigant” or something similar but more concise?
- whoiscroberts 3y ago
  Why not? To give the impression to ‘headline only’ readers that congress people do in fact get in trouble for insider trading.
jrockway 3y ago
The thing that always gets the insider traders is using non-public information. Is there an approved way to make the information public, so you can trade right after you do that? Like, nobody is going to trust you, so it probably won't make the price change much. But, the information was technically public. The question I have is, what does "public" mean?
- jeffbee 3y ago
  You'd have to abide by Reg FD[1] in making such a disclosure and you also must wait a "reasonable" time before trading on the disclosed information, which is why insider trading windows don't open for one or several days after a company announced earnings, for example. 1: https://www.investor.gov/introduction-investing/investing-basics/glossary/fair-disclosure-regulation-fd https://www.investor.gov/introduction-investing/investing-ba...
  - jrockway 3y ago
    That makes sense. Everyone has always come up with my scams before ;)
- mandevil 3y ago
  This sounds like a particularly common failure mode for software engineers in dealing with the law. In software engineering, we have strict rules, and most of our thoughts are devoted to exception handling, so we're thinking about exceptions and what the behavior of the system will be in unusual cases. Law doesn't work that way. If you try and build a clever but hacky argument they don't care. They don't say "what a clever hack, you got us, you're free to go." They arrest you and charge you and maybe after your life is ruined by the expense of your legal defense, you don't actually have to go to prison (presuming you got bail for the 12-18 months it took for your case to wend through the courts)! Congratulations, you won your case! That's the good outcome! See, the law is enforced by people, not rules- it's the police, the prosecutors, the judges and the juries who uphold the law, not straightforward and simple software code. And people (very much including juries!) can tell what the intent of a law is, and they will (most of the time) enforce the intent of that law. Schemes to try and game the laws? That looks an awful lot like a guilty conscience which is sometimes a required factor in whether a crime was committed (especially on the sorts of financial crimes we're talking about here). As for the actual law defining what public disclosure is, it's Regulation Fair Disclosure (https://www.federalregister.gov/documents/2000/08/24/00-21156/selective-disclosure-and-insider-trading https://www.federalregister.gov/documents/2000/08/24/00-2115... or https://www.ecfr.gov/current/title-17/chapter-II/part-243 https://www.ecfr.gov/current/title-17/chapter-II/part-243). As I understand it, basically, the key step is that you file a 8-K form with the SEC who takes responsibility for publishing it widely, and there are rules on blackout periods for insider transactions around the filing of those 8-K's, but I'm not a lawyer, definitely don't treat what I say as legal advice, I just had to sit through lectures on this back when I worked as an engineer for a financial firm.
elintknower 3y ago
Ah, so as long as you keep getting elected you won't be charged... that's the new game...

98 points by perihelions 3y ago

https://www.justice.gov/usao-sdny/pr/former-congressman-sentenced-22-months-prison-insider-trading https://www.justice.gov/usao-sdny/pr/former-congressman-sent... https://en.wikipedia.org/wiki/Steve_Buyer https://en.wikipedia.org/wiki/Steve_Buyer

kube-system 3y ago
I love the nominative determinism. He was an early buyer.

colechristensen 3y ago

This isn’t as interesting as the headline makes it seem. He had not been in Congress a years when the insider trading took place.

fatfingerd 3y ago
Looks like he stepped down to stop investigations into the Frontier Foundation, a scam NGO for nepotism and transfers of wealth?
- asoneth 3y ago
  > a scam NGO for nepotism and transfers of wealth I thought you might be exaggerating, but if the wikipedia entry is to believed it seems like a pretty obvious case of laundering bribes: "In 2003, Buyer created The Frontier Foundation, whose stated purpose is educational funding for college students ... Buyer's daughter Colleen was the president ... His son Ryan, in 2009, was director ... the foundation shared an office with Buyer's campaign office ... annual fundraising golf outings had raised more than $880,000 for the foundation. Almost all the contributions were from 20 companies and trade organizations that had interests before the House Energy and Commerce Committee, of which Buyer is a member ... In 2018, the Frontier Foundation was closed by Buyer, the only listed officer, without ever having funded a scholarship." Excerpts from: https://en.wikipedia.org/wiki/Steve_Buyer#Frontier_Foundation https://en.wikipedia.org/wiki/Steve_Buyer#Frontier_Foundatio...
  - fatfingerd 3y ago
    He seems to have played all the important roles for violating lobbying ethics, and probably wasn't consulting at a tobacco and then telco company out of coincidence, either his presence or his purpose would have been a facilitation of laundering. 22 months is embarrassing, that no other agency could put him away first is even more embarrassing.
- infamouscow 3y ago
  > scam NGO The word "scam" is a redundant modifier for an NGO :)
chews 3y ago
Funny enough had he been in Congress he’d be in the clear.
- simplicio 3y ago
  Why? Chris Collins was convicted of insider trading while in congress just a few years ago. I don't think there's any special protections for Congress-folk from insider trading laws.
  - edgyquant 3y ago
    It’s just a talking point people like to parrot

alwaysrunning 3y ago

Ah, the things you get to hear as a consultant.

olliej 3y ago

He was not a congressman at the time he did this. It's absurd that if he made use of the same secret information but while employed as a congressman (even if he was overseeing the merger) would mean he was fine.

kasey_junk 3y ago
This is a weird myth that has been debunked repeatedly: https://www.everycrsreport.com/files/20170412_RS21127_36174d2b18e501200b69074ce8f237e5d2832b15.pdf https://www.everycrsreport.com/files/20170412_RS21127_36174d... Congress people and their staff are not immune from insider trading rules and in fact there is an explicit law saying so.
- pseg134 3y ago
  Sure, but they are not considered “insiders” when trading on non public information obtained during their official duties. So sure, if his wife told him about her company’s merger he could go to jail. You are either ignorant or willfully misleading people.
  - kasey_junk 3y ago
    Lots of people aren’t considered insiders when trading on non public information obtained during their official duties. Congress people aren’t held to a different standard here. If you want to argue that they should be held to a higher standard that’s reasonable but the way the comment was worded suggested there is some extra immunity for Congress. Which there isn’t.
    - fsckboy 3y ago
      well then, you are either educated/intelligent, or thoughtfully trying not to mislead people! which one is it, buddy!? what is the definition of non-public information in the context of congress and corporate "inside" information? If the congressional subcommittees get briefed on the Covid crisis or trade laws or policy, they might have advance knowledge that companies themselves don't have. Or if a company insider reveals information to subcommittees, is that actually making the information public?

Racing0461 3y ago

what about "current congressman"?

mc32 3y ago
Of course, they are allowed[1], why would they be bound by the laws that govern the governed? [1]https://blogs.luc.edu/compliance/?p=4459 https://blogs.luc.edu/compliance/?p=4459

jeffbee 3y ago

Amazing how much risk a person will accept for only $300k in profits. Guy was an attorney and ex-Congressman who could have scared up that amount of money in no time.

pcurve 3y ago
Maybe he thought the small amount would let him fly under the radar.
tester756 3y ago
>who could have scared up that amount of money in no time. What makes you think so?
- diogenes4 3y ago
  For one example, see Barney Frank, co-author of the Dodd-Frank act. After retiring from congress he found himself with a board role on Signature Bank. Over the seven years he "worked" there he accumulated around $1M in salary + equity. Or for another example, see the Hunter Biden/Burisma story. I think the media coverage of this is mostly partisan quackery, but it's a useful illustration here as to how you can make a good deal of money just being vaguely associated with american politicians. Hunter is certainly not unusual in this regard.
  - deleted 3y ago
    [deleted]

atdrummond 3y ago

This is a frustrating title. While it is technically true, it elides some important information and context: - He had been out of Congress for over 8 years at the time of the Sprint/T-Mobile merger. - He made considerably larger gains (2x, $100k more nominally) on his Navigant insider trade. - None of his insider trading was related to either Congress directly or congressional info on the named merger, as one might infer from the title. Why not “Former Rep. Turned Consultant Illegally Traded On Client Info From T-Mobile And Navigant” or something similar but more concise?

whoiscroberts 3y ago
Why not? To give the impression to ‘headline only’ readers that congress people do in fact get in trouble for insider trading.

jrockway 3y ago

The thing that always gets the insider traders is using non-public information. Is there an approved way to make the information public, so you can trade right after you do that? Like, nobody is going to trust you, so it probably won't make the price change much. But, the information was technically public. The question I have is, what does "public" mean?

jeffbee 3y ago
You'd have to abide by Reg FD[1] in making such a disclosure and you also must wait a "reasonable" time before trading on the disclosed information, which is why insider trading windows don't open for one or several days after a company announced earnings, for example. 1: https://www.investor.gov/introduction-investing/investing-basics/glossary/fair-disclosure-regulation-fd https://www.investor.gov/introduction-investing/investing-ba...
- jrockway 3y ago
  That makes sense. Everyone has always come up with my scams before ;)
mandevil 3y ago
This sounds like a particularly common failure mode for software engineers in dealing with the law. In software engineering, we have strict rules, and most of our thoughts are devoted to exception handling, so we're thinking about exceptions and what the behavior of the system will be in unusual cases. Law doesn't work that way. If you try and build a clever but hacky argument they don't care. They don't say "what a clever hack, you got us, you're free to go." They arrest you and charge you and maybe after your life is ruined by the expense of your legal defense, you don't actually have to go to prison (presuming you got bail for the 12-18 months it took for your case to wend through the courts)! Congratulations, you won your case! That's the good outcome! See, the law is enforced by people, not rules- it's the police, the prosecutors, the judges and the juries who uphold the law, not straightforward and simple software code. And people (very much including juries!) can tell what the intent of a law is, and they will (most of the time) enforce the intent of that law. Schemes to try and game the laws? That looks an awful lot like a guilty conscience which is sometimes a required factor in whether a crime was committed (especially on the sorts of financial crimes we're talking about here). As for the actual law defining what public disclosure is, it's Regulation Fair Disclosure (https://www.federalregister.gov/documents/2000/08/24/00-21156/selective-disclosure-and-insider-trading https://www.federalregister.gov/documents/2000/08/24/00-2115... or https://www.ecfr.gov/current/title-17/chapter-II/part-243 https://www.ecfr.gov/current/title-17/chapter-II/part-243). As I understand it, basically, the key step is that you file a 8-K form with the SEC who takes responsibility for publishing it widely, and there are rules on blackout periods for insider transactions around the filing of those 8-K's, but I'm not a lawyer, definitely don't treat what I say as legal advice, I just had to sit through lectures on this back when I worked as an engineer for a financial firm.

elintknower 3y ago

Ah, so as long as you keep getting elected you won't be charged... that's the new game...