It’s always healthy to maintain a relationship with your parents when you can come to them and tell them anything. Unless that conversation happens to be about financial secrets that could result in millions of dollars being moved and screwing up the stock market…then you should probably keep that to yourself.
One man is learning that the hard way after he was found guilty for insider trading. Sean Stewart is the man in question, and he’s a 35 year old that graduated from Yale University. After college, Stewart went to work for some of the biggest players in the financial world, including Perella Weinberg Partners and JPMorgan Chase & Co..
Due to his positions. Stewart was privy to a lot of valuable information, including upcoming mergers that were not yet announced. Stewart relayed this information to his father, Robert. Sean Stewart faced nine charges in front of a federal jury in New York City, and he was found guilty on every one of them after six days of deliberations.
It seemed that the jury had their struggles in determining a verdict, with one of the jurors saying that “I think it’s fair to say this is a family tragedy.” Some thought that the jury would come back with a not guilty verdict after taking so much time to deliberate. Among them was Stewart’s lawyer, Martin Cohen, who said that “We’re obviously very disappointed. We think the jury got it wrong.”
If Stewart’s father would have made it big on just one or two of these trades, it might have just been chalked up to some lucky guesses. However, Sean revealed that there were five unannounced mergers incoming that caused his father to make several trades along with friend Richard Cunniffe. Among the mergers was the large one between INC Research and Kendle International, Inc. Cunniffe alone made nearly $1.2 million in the trades according to prosecutors while Robert took home around $150,000.
Sean Stewart wasn’t the only one in trouble, obviously, as his father and Cunniffe were both facing charges. Robert Stewart was working as an accountant before the trial, and he had already served a year of home detention after pleading guilty well before Sean Stewart’s trial. As for Cunniffe, he pleaded guilty right around the same time as Robert Stewart, and helped with the investigation on Sean Stewart afterward.
Sean’s defense team said that he had spoken to his father about incoming mergers, but that he only did it while in a conversation about work. He also claimed that he never advised his father to make any trades regarding the mergers, and that he was “betrayed” by his father for using the information. While on the stand, Stewart explicitly said that “I never gave my father information so he could trade on it.”
Recordings by Cunniffe while cooperating with investigators said otherwise, as a conversation was picked up between he and Robert where Robert claimed that Sean told him “I handed you this on a silver platter and you didn’t invest in this.” You would think that Sean Stewart would have a good legal team on hand, but he was left strapped for cash after recently going through a divorce and being forced to pay high amounts of child support.
So what will become of Sean Smith now that he has been found guilty? There is almost a guarantee of prison time as the federal guidelines say that the conviction is typically at least five years. While it might not be that long, you can expect Smith to do some hard time while the punishments for his co-conspirators has already come to an end.