NEW YORK (Reuters) - U.S. prosecutors on Monday sought to brand a former Wall Street investment banker as a liar after he took the stand in his own defense to deny engaging in a years-long insider trading scheme with his father.
In her closing argument, Assistant U.S. Attorney Sarah McCallum urged a federal jury in Manhattan to reject a “web of lies” conveyed during testimony by Sean Stewart, an ex-banker at Perella Weinberg Partners and JPMorgan Chase & Co.
While Stewart, 35, had testified that he never intended to help his father profit through insider trading, McCallum said evidence, ranging from emails to trading records, and the testimony of a cooperating witness showed his testimony was “ridiculous.”
“This is no place for stories,” she said. “It is a place for evidence.”
Martin Cohen, Stewart’s lawyer, sought to show his client’s story was supported by evidence.
While Stewart may have in violation of his employers’ policies by speaking with his family about confidential matters at his work, Cohen said, he never did so intending to help his father, Robert Stewart, to illegally trade on the information.
Cohen said that Robert Stewart, who was struggling financially, betrayed his son to profit on shares of companies mentioned in conversation and that Sean Stewart expected him to treat the information as confidential.
“Sean Stewart is absolutely innocent,” Cohen said. “He never tipped his father.”
The trial is the first insider trading case for prosecutors under Manhattan U.S. Attorney Preet Bharara to reach a jury since a U.S. appeals court curtailed their ability to pursue such charges.
Bharara, who attended parts of Monday’s proceedings, has overseen prosecutions of 107 people for insider trading since 2009. But a 2014 appellate ruling narrowed the scope of insider trading laws, resulting in charges being dropped or dismissed against 14 people.
Stewart was charged in May 2015 and accused of providing his father information about five mergers that JPMorgan and Perella were advising from 2011 to 2014 so the elder Stewart could trade before news of the deals was announced.
Prosecutors said Robert Stewart, 61, in several instances had two work associates, including Richard Cunniffe, 62, conduct trades for him in exchange for a cut of the profits. The trading resulted in $1.4 million in illicit gains, McCallum said.
Both Robert Stewart and Cunniffe, who testified at trial and who secretly recorded the elder Stewart discussing the scheme, have pleaded guilty.
The case is U.S. v. Stewart, U.S. District Court, Southern District of New York, No. 15-cr-00287.
Reporting by Nate Raymond in New York; Editing by Dan Grebler