A Long Island-reared former investment banker testifying Monday in federal court in Manhattan said he is “on trial for my life” and maintained that his father exploited merger information he mentioned in passing.
But Sean Stewart acknowledged breaching confidentiality oaths and lying in what he said was a panic to lawyers at his former firm.
Stewart, 35, who now lives in Manhattan, is accused of partaking in a father-son insider-trading scheme that yielded $1.4 million in unlawful gains. The former employee of JPMorgan Chase & Co. and Perella Weinberg Partners said the bonds of trust in their close-knit family are shattered.
“It’s been damaged, perhaps permanently damaged,” Stewart said, of the relationship he had with his father, Robert Stewart, 61, of North Merrick. Robert Stewart has pleaded guilty.
“He used me and it has resulted in the loss of my career and reputation,” Sean Stewart said. “I love him. I always will. . . . I’m hopeful that over time, we can get through this, but it will be tough.”
Stewart’s mother, Claudia, also testified, at some points in tears, saying her son and husband never had furtive conversations in her presence. She said Robert Stewart was a “very hardworking, proud man” who never let on that he was embroiled in financial troubles.
Manhattan U.S. Attorney Preet Bharara, whose office brought the case against Sean and Robert Stewart, sat in on the proceedings for several hours.
In her closing argument, Assistant U.S. Attorney Sarah McCallum argued to jurors that Sean Stewart “deliberately tipped” his father because trades that Robert Stewart and two associates had made in relation to five separate mergers between 2011 and 2015 were too conveniently timed to key developments in the business deals. She painted Sean Stewart as a habitual liar and said the parents were under pressure for their shares of their two sons’ weddings.
McCallum said Sean Stewart asked himself, “What was the quickest and cheapest way for him to help fund his own wedding?”
Defense attorney Martin Cohen countered that Sean Stewart, earning $500,000 a year in 2011 and poised to make much more as he moved up the ladder, wasn’t in a position to take such a reckless risk. He said Stewart committed no crime by sharing general information that his father then passed on to trading partner Richard Cunniffe. Cohen said Cunniffe, who also pleaded guilty and wore a wire as a cooperating witness, was the mastermind of the conspiracy, profiting far more from Sean Stewart’s information than Robert Stewart did.
“This is a one-man fraud show: Richard Cunniffe,” Cohen said.
The prosecution is set to deliver a rebuttal Tuesday morning and the jury is expected to begin deliberations.