Former JPMorgan Banker Convicted Of Insider Trading

by Tyler Durden

Aug 17, 2016 12:33 PM

http://www.zerohedge.com/news/2016-08-17/former-jpmorgan-banker-convicted-insider-trading

In one of the few cases of insider trading leading to an actual conviction, earlier today, a former Wall Street investment banker was found guilty for engaging in insider trading by tipping his father off to unannounced healthcare mergers, a victory for prosecutors after an appellate ruling made pursuing such cases harder. Sean Stewart, who previously worked at JPMorgan and Perella Weinberg was found guilty by a federal jury in Manhattan on all nine counts he faced, including securities fraud.

Stewart, 35, a Yale University graduate, was one of 107 people accused of insider trading since 2009 by prosecutors under Manhattan U.S. Attorney Preet Bharara. His trial was Bharara's first since a 2014 appellate ruling narrowed the scope of insider trading laws.

Stewart is scheduled to be sentenced by U.S. District Judge Laura Taylor Swain on February 17.

In a case profiled previously, prosecutors said from 2011 to 2014 Stewart provided his father Robert tips about five mergers, including INC Research's acquisition of Kendle International Inc, so his father could make lucrative trades before the deals' were announced. According to Reuters, Robert Stewart, 61, in some instances had a friend he met working at a real estate firm, Richard Cunniffe, conduct trades in his own accounts, because of concern he was too close to the source. The trading enabled the elder Stewart and Cunniffe, 62, to make $1.16 million, prosecutors said.

Sean Stewart testified in his own defense. He displayed no emotion as the forewoman read the verdict, which came after more than a week of deliberation. 

Robert Stewart, Sean's father, previously avoided prison for his role in the insider-trading conspiracy. In May, he was sentenced to four years’ probation, including one year of home detention and 750 hours of community service. Under a plea agreement with the government, he’ll forfeit the $150,000 he made from the scheme.

Stewart pleaded guilty in August to insider-trading conspiracy, just three months after both Stewarts were charged. Prosecutors, with the support of U.S. probation officials, had asked for a prison sentence of at least 2 1/2 years. U.S. District Judge Laura Swain in Manhattan, explaining her rejection of a prison term, cited Stewart’s role as primary caregiver for his wife, who has an “unusually serious” health condition that wasn’t discussed publicly.
Cunniffe cooperated with the government and made secret recordings to implicate the Stewarts. In one recorded meeting, the elder Stewart said his son once chastised him for failing to trade on a tip, quoting him as saying, “I can’t believe I handed you this on a silver platter and you didn’t invest in it,” prosecutors said.