Wall St. banker merely discussed work with inside trader dad: lawyer
By Nate Raymond
NEW YORK (Reuters) – The defense lawyer for a former Wall Street investment banker charged with giving his father inside information insisted on Wednesday that his client had no intention of conveying trading tips while discussing his work.
Defense lawyer Mark Gombiner told jurors in Manhattan federal court that Sean Stewart, who worked at Perella Weinberg Partners and JPMorgan Chase & Co<JPM.N>, never intended to help his father trade ahead of five unannounced mergers.
Instead, Gombiner said Robert Stewart, the banker’s father, overlooked the trust his son placed in him and worked with another man to make over $1 million executing trades based on company names his son mentioned while discussing his work.
“He ended up betraying his son, as he was weak and foolish and selfish,” Gombiner said in his opening statement.
But Assistant U.S. Attorney Brooke Cucinella insisted that Sean Stewart had set out to help his father gain an “illegal edge” by giving him tips about healthcare deals he was working on.
“It’s not hard to get an A when someone has already given you the answers to the test,” Cucinella said.
The trial stems from one of several insider trading cases pursued by Manhattan U.S. Attorney Preet Bharara’s office, which has charged 107 people since 2009.
The trial is the office’s first since it suffered a major setback in 2014 when an appellate court limited the scope of insider trading laws, causing charges against 14 people to be dropped or dismissed.
Prosecutors contend Sean Stewart, 35, tipped his father about five unannounced healthcare deals from 2011 to 2014, enabling Robert Stewart and an acquaintance, Richard Cunniffe, to make $1.16 million.
The case has already resulted in guilty pleas by Robert Stewart, 61, and Cunniffe, 61, who, Cucinella told jurors, cooperated with authorities and secretly recorded the elder Stewart discussing the scheme.
In one recording, Cucinella said, Robert Stewart said his son handed him inside information on a “silver platter.”
While jurors are expected to hear those recordings of Robert Stewart, they will not hear from him directly, despite a subpoena by his son’s attorneys.
Outside of jurors’ presence, Robert Stewart invoked his right against self-incrimination under the U.S. Constitution’s Fifth Amendment. No detailed reason was given.
U.S. District Judge Laura Taylor Swain, who heard additional closed-door arguments from the father’s lawyer, ruled he properly invoked the right despite his guilty plea to avoid “further adverse consequences.”
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 Alan Crosby and Dan Grebler)