Sean Stewart convicted of insider trading

UPDATE: Sean Stewart convicted on all counts.

Updated August 12, 2016 11:09 PM
By Matthew Chayes  matthew.chayes@newsday.com

A jury ended its first week of deliberations Friday apparently deadlocked on at least one of the counts charging a Long Island-reared investment banker with illegally passing his father insider trading tips worth $1.1 million.

AUSA McCallum examines FBI witness with jury seated left, Sean Stewart far right. 7/28/16 Artwork by Aggie Kenny

 Halfway into the fourth day of deliberations, the foreperson sent a note Friday to the judge saying that a unanimous verdict “may not likely happen” on each of the nine counts against Sean Stewart, 35, formerly of North Merrick.

Sean Stewart testifying in his own defense, Federal Defender Martin Cohen at podium representing Mr Stewart. Artwork by Elizabeth Williams

Sean Stewart’s father, Robert Stewart, 61, of North Merrick, has admitted profiting from information about pending mergers and acquisitions about which his son knew inside information because he was an investment banker on the deals.

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Sean Stewart faces up to 20 years in prison if convicted.

The jury’s note, sent out shortly after noon, said, “If the jury is at an impasse on a particular count, which we cannot resolve, does that mean that we have to render a not-guilty verdict, as the government has not met its burden of proof for some of the jurors? Or do we render a ‘no decision’ vote? There is no option on the verdict sheet for a ‘no decision’ option. Do we continue to deliberate until we come up with a unanimous decision, which may not likely happen?”

Investment banker testifies at his insider trading trial AP WIRE

NEW YORK (AP) — An investment banker charged with teaming with his father to use inside information to make money in the stock market insisted from the witness stand Thursday that he never knew his father would make illegal trades.

“I am innocent,” Sean Stewart said at his Manhattan federal court trial. “I never ever gave my father information expecting him to trade.”
Prosecutors say Stewart fed Robert Stewart information about five pending mergers involving public health care companies, enabling him to work with a stock broker to earn $1.1 million illegally. During the four-year period from 2011 to 2015, Sean Stewart worked first for JPMorgan Chase & Co. and later at Perella Weinberg Partners LP.
Authorities said Robert Stewart got $150,000 and the broker got the rest, while the father passed along some winnings by paying for his son’s 2011 wedding rehearsal dinner and a photographer. The father has pleaded guilty and was sentenced to a year of home detention.
Sean Stewart, 35, testified he had such a close relationship with his parents that he sometimes talked about work, including pending acquisitions that were supposed to be secret. He said earned less than $100,000 annually at JPMorgan after finishing at Yale in 2003, but had boosted his pay to about $500,000 by 2010, when he was made vice president.

Sean Stewart on the stand questioned by his defense attorney Martin Cohen. "I spoke very freely with them( his parents). I know now that the consequences are severe,” Stewart said. “At the time, it felt completely natural to have these discussions.” Artwork by Elizabeth Williams

He said he never told his parents they should not trade on any information they heard from him because it never occurred to him that they would do so.
He said he never told his father the price that a company would be sold for or when a sale would occur, answering “absolutely not” repeatedly when asked those questions about each deal.
The son testified he could not recall talking about some of the deals at all, though he conceded he must have because his father initiated stock trades with information he could not have gotten elsewhere.
Even on those deals, though, Stewart insisted he never would have mentioned the amount of money involved or the anticipated closing dates.
 http://www.salon.com/2016/08/04/investment_banker_testifies_at_his_insider_trading_trial/