According to federal authorities, an unnamed T-Mobile executive went golfing with Stephen Buyer, a former US Congressional representative for Indiana, in March of 2018. That's when the T-Mobile executive told Buyer that T-Mobile would probably buy Sprint.

"Buyer began purchasing Sprint securities the next day, and, ahead of the merger announcement, he acquired a total of $568,000 of Sprint common stock in his own personal accounts, a joint account with his cousin, and an acquaintance's account," the SEC wrote in a release this week. "After news of the merger leaked in April 2018, Buyer saw an immediate profit of more than $107,000."

And that, according to the US Department of Justice (DoJ), is illegal.

"Buyer, 63, of Noblesville, Indiana, has been charged with four counts of securities fraud, each of which carries a maximum term of 20 years in," according to a release from the DoJ. "Buyer was arrested this morning [July 25] and the case has been assigned to US District Judge Richard Berman."

For his part, Buyer argues that he is innocent. "His stock trades were lawful. He looks forward to being quickly vindicated," Buyer's attorney, Andrew Goldstein of Cooley LLP, told Politico.

Nonetheless, the development is noteworthy considering Congressional stock trading has become a hot topic lately. Sen. Richard Burr (R-N.C.), Sen. James Inhofe (R-Okla.), Sen. Dianne Feinstein (D-Calif.) and others have been investigated for some of their trading.

Figure 1: (Source: Anna Berkut/Alamy Stock Photo)

But the case against Buyer is noteworthy in telecom circles considering T-Mobile's blockbuster acquisition of Sprint rewrote the wireless marketplace in the US. The transaction – which closed in 2020 – positioned T-Mobile to take on heavyweights Verizon and AT&T, and also set up Dish Network to replace Sprint as a fourth nationwide wireless network operator.

Such transactions are often closely guarded secrets. However, Buyer offered consulting services to various firms, including T-Mobile, through the Steve Buyer Group. But using nonpublic information to buy and sell stock falls squarely in the realm of insider trading.

According to the DoJ's release, Buyer also used such information to make around $223,000 via illegal trades in Navigant stock, before that company's sale to Guidehouse.

"When insiders like Buyer – an attorney, a former prosecutor, and a retired Congressman – monetize their access to material, nonpublic information, as alleged in this case, they not only violate the federal securities laws, but also undermine public trust and confidence in the fairness of our markets," Gurbir Grewal, director of the SEC's enforcement division, said in a release. "We are committed to doing all we can to maintain and enhance public trust by leveling the playing field and holding Buyer accountable for illegally profiting from his access."

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano