Sean Stewart insider trading case goes to federal jury
Sean Stewart leaves a federal courthouse in Manhattan after the first day of deliberations in his trial on Tuesday, Aug. 9, 2016. Stewart is accused of passing tips about health care mergers to his father, Robert Stewart. Credit: Charles Eckert
A federal jury in Manhattan on Tuesday began deliberating the fate of a Long Island-reared scholar-athlete charged in a $1.1 million, father-son insider-trading scam.
The jury of eight women and four men must decide whether former investment banker Sean Stewart, 35, who grew up in North Merrick, tipped off his father, Robert Stewart, 61, about confidential deals between 2011 and 2015 so that the elder man and others could profit illegally.
Sean Stewart, who testified in his own defense, faces up to 20 years in prison if convicted of the nine criminal counts, including securities fraud and conspiracy. The trial in U.S. District Court began late last month.
His father, an accountant from North Merrick, and a trading partner, Richard Cunniffe, have pleaded guilty.
Earlier Tuesday, prosecutor Brooke Cucinella called Sean Stewart “brazen” for testifying that he discussed pending deals with his dad, in violation of his duty to then-employers JPMorgan Chase & Co. and Perella Weinberg Partners, only as a way of bonding with his father.
The younger man continued to do so even after regulators in 2011 flagged trading by his father as potentially connected to his son’s insider knowledge, prosecutors said.
The younger Stewart, a graduate of Kellenberg Memorial High School in Uniondale and Yale University, testified that his dad “betrayed” him by trading based on their family discussions. The government said the father used $10,000 from ill-gotten gains to pay for his son’s wedding photographer.
In her final summation, Cucinella showed jurors transcripts of secretly-recorded conversations between the elder Stewart and Cunniffe, who cooperated with the government and is hoping for leniency.
In one transcript, Stewart recounts being scolded by his son for failing to act on a tip he gave his dad “on a silver platter.”
The defense points to other conversations where the father appears to say otherwise.
“Sean Stewart lied,” Cucinella told jurors Tuesday, as Sean Stewart sat with his hands folded on the defense table. “He sat right in front of you and he lied.”
Stewart, who wore a dark, pinstriped suit, yellow patterned tie and loafers, showed no reaction, sipping coffee, green Vitamin water and a “Lean Body” shake from a carton.
Stewart’s mother, Claudia, who testified for her son earlier this week, sat in the front row of the courtroom and the two kissed once the jury left the room.
The jury foreman sent out notes asking for testimony transcripts, audio of secretly-recorded conversations, a “basic” definition of “insider trading” and masking tape — requests that U.S. District Judge Laura Taylor ordered fulfilled.
Matthew Chayes, a Newsday reporter since 2007, covers New York City.
'No one wants to pay more taxes than they need to' Nearly 20,000 Long Islanders work in town and city government. A Newsday investigation found a growing number of them are making more than $200,000 a year. NewsdayTV's Andrew Ehinger reports.
'No one wants to pay more taxes than they need to' Nearly 20,000 Long Islanders work in town and city government. A Newsday investigation found a growing number of them are making more than $200,000 a year. NewsdayTV's Andrew Ehinger reports.
