NEW YORK (Reuters) - A former Wall Street investment banker proclaimed on Thursday that he was innocent of insider trading charges, testifying that he never tipped his father off to inside information about healthcare mergers.
Sean Stewart, who worked at Perella Weinberg Partners and JPMorgan Chase & Co (JPM.N), took the stand in his own defense, telling jurors in federal court in Manhattan that he never intended to help his father profit through insider trading.
“I never gave my father information so he could trade on it,” Stewart testified.
He acknowledged that despite his employers’ requirements to keep details about unannounced mergers confidential, he “spoke very freely” with family members including his father, Robert Stewart, about his job, occasionally mentioning client names.
But Stewart, 35, testified he did so in the context of discussing scheduling around his 2011 wedding or talking about his career, never expecting anyone to trade on the information.
“In hind sight, what I was doing was incredibly foolish,” Stewart said.
Stewart’s testimony came shortly after prosecutors rested in presenting evidence against him and as the trial neared its end. Closing arguments are expected on Monday.
He was charged in May 2015 alongside his father, who prosecutors say with a friend, Richard Cunniffe, made $1.16 million from 2011 to 2014 trading on tips about five healthcare deals provided by his son.
The case has resulted in guilty pleas by Robert Stewart, 61, and Cunniffe, 62, who, according to prosecutors, secretly recorded the elder Stewart saying his son criticized him for not trading on a tip.
As evidence the younger Stewart knew about his father’s actions, prosecutors cite trades Robert Stewart and Cunniffe placed before mergers the banker was working on even after at one point he was questioned about his father’s trading.
In that instance, a regulatory inquiry was launched into trades placed by individuals including Robert Stewart before INC Research’s 2011 acquisition of Kendle International Inc, a JPMorgan client.
Testifying, Stewart said he did not know about his father’s trades until the inquiry and did not believe his father’s denials about insider trading when he confronted him.
Nevertheless, Stewart said he lied to JPMorgan compliance officials about whether his father could have learned about the deal from him, as he was worried about what would happen to his career and father. He later called his father, he said.
“I told him to never do that again,” Stewart said.
The case is U.S. v. Stewart, U.S. District Court, Southern District of New York, No. 15-cr-00287.
Reporting by Nate Raymond in New York; Editing by David Gregorio and Chris Reese