Former Investment Banker Found Guilty of Insider Trading in Second Criminal Trial

September 26, 2019/US SEC

On September 23, 2019, a jury in federal court in Manhattan again returned a guilty verdict against former investment banker, Sean R. Stewart, for insider trading and related criminal charges in a criminal action prosecuted by the U.S. Attorney’s Office for the Southern District of New York. Stewart was convicted on these charges for the first time in August 2016 and was sentenced to three years in prison in February 2017. The U.S. Court of Appeals for the Second Circuit last year overturned Stewart’s conviction and ordered a new trial. The SEC’s civil action against Sean Stewart on related charges is pending.

According to the SEC’s related civil complaint, Stewart illegally tipped his father, Robert K. Stewart, about future mergers and acquisitions involving clients of two investment banks for which Stewart worked. The complaint alleges that Stewart’s father, a certified public accountant, cashed in on the tips by placing trades himself and by recruiting a partner to place trades ahead of the public announcement of these corporate transactions, generating approximately $1.1 million in illicit proceeds. In a related complaint, the SEC also charged Robert Stewart‘s trading partner, Richard Cunniffe, who cooperated in the investigation. Both Robert Stewart and Cunniffe pled guilty to criminal charges and agreed to settle the SEC’s civil charges against them.

The SEC’s investigation was conducted by David W. Snyder and John S. Rymas. The case was supervised by Joseph G. Sansone, Kelly L. Gibson, and Assunta Vivolo. The litigation against Sean Stewart is being led by Jennifer C. Barry and Julia C. Green of the SEC’s Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

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