Date
25 July 2017
Sean Stewart (left) walks out of federal court after a hearing before his insider trading trial in Manhattan. Photo: Reuters
Sean Stewart (left) walks out of federal court after a hearing before his insider trading trial in Manhattan. Photo: Reuters

Ex-Wall St banker accused of insider tips to father faces trial

A former Wall Street investment banker faces trial in Manhattan for insider trading, the first since a US appeals court curtailed the ability federal prosecutors to pursue such cases.

Sean Stewart, an ex-banker at Perella Weinberg Partners and JPMorgan Chase & Co., is accused of supplying inside information to his father about unannounced healthcare mergers, Reuters reports.

Jury selection is expected to begin Monday.

Prosecutors say Stewart’s accountant father Robert and Richard Cunniffe, an acquaintance who worked at a boutique investment bank, made US$1.16 million trading on tips about five healthcare deals.

The mergers included INC Research’s 2011 acquisition of Kendle International Inc.

The case has resulted in guilty pleas by Robert Stewart, 61, and Cunniffe, 61, who, according to prosecutors, secretly recorded the elder Stewart saying his son criticized him for not trading on a tip.

“I handed you this on a silver platter and you didn’t invest in this,” Robert Stewart quoted his son as saying, according to prosecutors.

Sean Stewart, 35, is expected to argue he believed his father would keep the information secret and not trade on it, according to court records.

“After a year of being dragged through the mud, he is looking forward to clearing his name at trial,” said Martin Cohen, Stewart’s lawyer.

The case is being pursued by Manhattan US Attorney Preet Bharara’s office, which has charged 107 people with insider trading since 2009.

The trial is his office’s first since suffering a major setback in 2014, when an appellate court limited the scope of insider trading laws, causing charges against 14 people to be dropped or dismissed.

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