A former investment banker from Long Island accused in a $1 million father-son inside trading scheme testified in Manhattan federal court Thursday that he was betrayed by his dad while his own life was on a five-year roller-coaster of marriage, fatherhood and divorce.
“I am innocent,” Sean Stewart, 35, of Manhattan and formerly of North Merrick, told jurors during five hours on the stand. “I never gave my father information so that he could trade on it or so that he could cause someone else to trade on that information.”
The tall, well-dressed former Kellenberg High School scholar-athlete and Yale graduate was soft-spoken, composed and articulate during a day of direct examination, insisting he never dreamed his dad would trade on private family chats about his business successes.
“I grew up in a household where we had no secrets and we shared everything. It was completely natural,” he said, adding later, “In hindsight I was incredibly foolish.”
Stewart, who worked at J.P. Morgan Chase Co. and Perella Weinberg Partners, allegedly passed tips on five merger deals from 2011 to 2015 to his dad, accountant Robert Stewart, 61, of North Merrick. Robert and trading partner Richard Cunniffe have pleaded guilty.
The father is not testifying, and Cunniffe, a cooperating witness, said he had no idea whether Sean Stewart knew his dad was trading. The key evidence is a taped conversation in which Robert Stewart said his son knew, and a 2011 incident in which regulators flagged trades by Robert Stewart, but Sean Stewart denied that he had shared information with him.
Sean Stewart admitted Thursday that he was shocked to see his dad’s name when he was questioned by J.P. Morgan officials, and lied because he was scared. “I was nervous about my dad getting in trouble, I was nervous about my career,” he testified.
Sean Stewart said he privately confronted his father, who seemed “confused, ashamed” but said he had not made the trades based on what his son disclosed. Asked by his defense lawyer if he believed his father, Sean Stewart responded, “I wanted to, but I did not.”
He told his father to never do something so “foolish” again, Sean Stewart testified, and over the next several years resumed his habits of talking candidly and occasionally letting tidbits about corporate deals slip, confident his dad would not misuse them.
“My dad was pretty shaken up and he had promised me he would never do it again,” Sean Stewart said. “I had no reason or expectation that he would ever trade on information that came up in our conversations again.”
The $750,000-a-year banker’s poised facade cracked slightly when his lawyers — trying to show how close he was with his parents — had him read aloud dozens of emails with them chronicling family tensions over his 2011 marriage, and the couple’s breakup after they had a baby boy.
He choked up and paused twice reading a 2012 email in which his parents urged him to get counseling for issues that were “boiling over.” A few minutes later, he read an email he sent them after the split, confiding, “My life sucks and I am worthless.”
The trial began last week.