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Ex-Wall St banker gets 3 years prison for insider trading
[NEW YORK] A former Wall Street investment banker was sentenced to three years in prison on Friday after he was convicted of engaging in insider trading by repeatedly tipping his father off to unannounced healthcare mergers.
Sean Stewart, who worked at Perella Weinberg Partners and JPMorgan Chase & Co, was sentenced by US District Judge Laura Taylor Swain in Manhattan, who called his conduct "outrageous".
"He chose personal convenience, appearances and family benefits over the ethical obligations he had to his employers," Judge Swain said.
Stewart, who at trial contended his father, Robert Stewart, traded without his knowledge based on their discussions about his work, in court acknowledged breaching his employers' trust to keep details about deals secret. "In my heart and in my mind, though, I know I did not commit a crime," Stewart said. "I know that to be true. I do know, however, that I made very serious mistakes."
Judge Swain also sentenced Stewart, 35, to serve one year of home detention following his release from prison, and she ordered him to pay a US$7,500 fine. Stewart is expected to appeal.
Jurors had found Stewart guilty last August of securities fraud and other charges, making him one of 85 people to be convicted in a wave of insider trading cases by Manhattan US Attorney Preet Bharara's office since 2009.
Prosecutors said that from 2011 to 2014, Stewart tipped his father about five mergers, including INC Research LLC's acquisition of Kendle International Inc. "This was protracted and brazen conduct propped up by lies," Assistant US Attorney Sarah Eddy said in court.
Robert Stewart, a Long Island accountant, in some instances arranged for a friend, Richard Cunniffe, to conduct trades in his own accounts because of concern he was too close to the source, prosecutors said.
The trading enabled the elder Stewart and Cunniffe to make US$1.16 million, prosecutors said.
At trial, Sean Stewart's lawyers acknowledged he spoke with his father about companies involved in mergers. But they said he did so while talking about his work, and that Robert Stewart betrayed his son by trading on the information.
Robert Stewart was sentenced in May 2016 to a year of home detention after pleading guilty in August 2015.
Cunniffe pleaded guilty in May 2015 and became a cooperating government witness. He is scheduled to be sentenced in July.
The case is US v Stewart, US District Court, Southern District of New York, No 15-cr-00287.