September 23, 2019 / 4:24 PM / 10 months ago

Ex-Wall Street banker Sean Stewart guilty in second insider trading trial

NEW YORK (Reuters) - Former Wall Street investment banker Sean Stewart was found guilty on Monday of insider trading a second time for passing tips about healthcare industry mergers to his father.

FILE PHOTO: Former Perella Weinberg investment banker Sean Stewart exits the Manhattan federal court house in New York City, U.S., July 27, 2016. REUTERS/Brendan McDermid

The verdict was handed down by a Manhattan federal jury, according to a spokeswoman for federal prosecutors, less than a year after an appeals court overturned Stewart’s earlier conviction and ordered a retrial.

A lawyer for Stewart, 38, could not immediately be reached for comment. He is scheduled to be sentenced on Jan. 29.

Prosecutors said Stewart, who worked at JPMorgan Chase & Co and Perella Weinberg Partners, passed tips to his father Robert from 2011 to 2015. They said the tips yielded $1.16 million of profit for Robert Stewart and his friend Richard Cunniffe, to whom he had forwarded some of them.

Stewart was convicted of the charges for the first time in August 2017. In Feburary 2017, U.S. District Judge Laura Taylor Swain sentenced him to three years in prison.

The 2nd U.S. Circuit Court of Appeals last year overturned his conviction and ordered a new trial. He had served about a year of his sentence.

The appeals court ruled that Stewart should have been allowed to challenge a crucial piece of evidence, a recorded conversation between his father and Cunniffe.

In the conversation, the elder Stewart recounted that his son complained about his failure to act on a tip by saying: “I handed you this on a silver platter and you didn’t invest in this.”

Swain barred Sean Stewart from introducing evidence about his father’s later statements to investigators suggesting that Stewart did not intend to commit insider trading and had been drinking when he made the “silver platter” comment.

U.S. District Judge Jed Rakoff, who oversaw the second trial, barred any mention of the “silver platter” comment altogether.

Robert Stewart pleaded guilty to a related conspiracy charge, and Cunniffe to fraud and conspiracy charges. Both were sentenced to probation.

Reporting By Brendan Pierson in New York; Editing by Tom Brown

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