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Former GOP Rep. Stephen Purchaser charged with insider buying and selling by federal prosecutors, SEC

WASHINGTON — Former Indiana Rep. Stephen Purchaser was arrested Monday on federal insider buying and selling prices, because the Securities and Trade Fee introduced a parallel civil criticism towards the Republican for a similar conduct.

The felony and civil actions each allege that Purchaser used a number of funding accounts owned or co-owned by his spouse, a former mistress, his son and his cousin for inventory transactions he executed after acquiring nonpublic data whereas working as a advisor for 2 totally different corporations after leaving Congress in 2011.

Purchaser additionally allegedly engaged in elaborate schemes to cowl up the supply of his data, in accordance with the felony indictment issued towards him by a grand jury in U.S. District Courtroom in Manhattan. That indictment prices him with 4 counts of securities fraud.

Purchaser served in Congress from 1993 to 2011, representing Indiana’s 4th Congressional District, beforehand numbered as its fifth.

(File 1988) Home Judiciary Committee member Rep. Stephen Purchaser (R/IN) carries his analysis supplies away on the conclusion of the impeachment proceedings December 12.


Prosecutors stated that in 2018 and 2019 Purchaser purchased greater than $1.5 million value of inventory in Dash and Navigant Consulting primarily based on insider data he acquired whereas doing consulting work.

He later offered the shares after the knowledge turned public, prosecutors allege.

Within the Dash scheme, prosecutors stated Purchaser used 4 totally different accounts to purchase greater than 112,000 Dash shares in a single week in 2018. He offered the shares in August of that yr, after information of Dash’s merger with T-Cellular turned public, for a revenue of greater than $126,000, in accordance with the indictment.

In 2019, he allegedly purchased greater than 16,000 shares of Navigant utilizing a number of accounts, after which offered almost all of them on the identical day, after information turned public that Navigant can be acquired by Guidehouse, authorities stated. The Navigant inventory sale netted roughly $223,000 in revenue.

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Purchaser allegedly unfold the inventory purchases in each corporations throughout seven totally different accounts.

They included two separate Particular person Retirement Accounts belonging to him alone; an funding account belonging to his spouse; a joint account Purchaser owned together with his spouse; a joint account Purchaser shared together with his son; and a joint account Purchaser shared together with his cousin. Purchaser additionally used a seventh account, owned by a lady recognized solely as “Pal-1,” as a part of the schemes.

Purchaser started a romantic relationship with the unidentified Pal-1 in 2006, in accordance with the SEC criticism.

In 2018, Purchaser used the lady’s IRA account to buy greater than $12,000 value of inventory in Dash, that criticism stated.

A yr later, he used the lady’s account once more to purchase $22,000 of inventory in Navigant, shortly earlier than each corporations had been acquired by Purchaser’s consulting purchasers, in accordance with the SEC.

In his effort to cowl up the schemes, Purchaser allegedly used analyst report printouts and phony notes in an effort to persuade investigators that his inventory purchases had been knowledgeable solely by publicly accessible market analysis, in accordance with authorities.

“When insiders like Purchaser — an legal professional, a former prosecutor, and a retired Congressman — monetize their entry to materials, nonpublic data, as alleged on this case, they not solely violate the federal securities legal guidelines, but additionally undermine public belief and confidence within the equity of our markets,” stated SEC Enforcement Division Director Gurbir Grewal in a press release.

Purchaser’s lawyer, Andrew Goldstein of Cooley LLP, advised CNBC in a press release, “Congressman Purchaser is harmless.”

“His inventory trades had been lawful. He seems ahead to being shortly vindicated,” Goldstein stated.

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