Ex-Wall Street banker convicted for giving father insider tips

Wed Aug 17, 2016 12:12pm EDT
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By Nate Raymond

NEW YORK (Reuters) - An ex-Wall Street investment banker was convicted on Wednesday of engaging in insider trading by tipping his father off to unannounced healthcare mergers, a victory for prosecutors after an appellate ruling made it harder to pursue such cases harder.

Sean Stewart, who previously worked at Perella Weinberg Partners and JPMorgan Chase & Co (JPM.N: Quote), was found guilty by a federal jury in Manhattan on all nine counts he faced, including securities fraud.

Stewart, 35, a Yale University graduate, displayed no emotion as the forewoman read the verdict, which came on the sixth day of deliberations following prior signs the jury was struggling to reach a consensus.

"I think it's fair to say this is a family tragedy," said Carmela Raiti, one of the jurors.

Martin Cohen, a lawyer for Stewart, said: "We're obviously very disappointed. We think the jury got it wrong."

Stewart had testified in his own defense. He 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.

Prosecutors said that 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.

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, prosecutors said.   Continued...

Former Perella Weinberg investment banker Sean Stewart exits the Manhattan federal court house in New York City, U.S. on July 27, 2016.  REUTERS/Brendan McDermid/File Photo - RTSLX67