SEC Obtains Final Judgment Against Banker Convicted in Insider Trading

The United States Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) today said it has obtained a final judgment against Sean Stewart who was part of the father-son insider trading scheme involving five different health care companies.

The SEC said Sean Stewart had leaked nonpublic information about potential mergers, acquisitions and tender offers. From 2011 to 2015, the alleged tipper passed confidential details about the bank’s clients many times to co-conspirators who then traded on the tips.

The insider trading conspiracy spanned over four years involving transactions, such as the acquisition of Kendle International Inc. by INC Research, LLC. and generated profits of approximately $1.1 million. Sean Stewart was sentenced to 3 years in prison after he pled guilty for passing information to his father Robert about future mergers and acquisitions involving clients of JPMorgan Chase & Co. and Perella Weinberg Partners.

Sean Stewart worked for the two investment banks but claimed at trial he did not know that his father was sharing the information with another partner, Richard Cunniffe, or trading on it.

Also around this time, Robert Stewart tipped Richard Cunniffe, a co-conspirator and cooperating witness who said that he was too close to the source to be trading stocks in his own account. He asked Cunniffe to buy call options for Sean’s stake in his brokerage account. Cunniffe agreed to do so and also mirrored for his own benefit the trades that the father was directing.

According to the complaint, the former executive is accused of violating ‎federal laws by using confidential information of nonpublic events related to certain securities.‎

All the defendants were arrested and faced similar SEC’s civil charges in a multi-count indictment for their involvement in different overlapping schemes. The regulator explained the current enforcement situation in its statement, which reads:

“The complaint further alleged that Stewart's father, Robert K. Stewart cashed in on the tips by placing trades himself and by recruiting a partner to place trades ahead of the public announcement of these corporate transactions, generating approximately $1.1 million in illicit proceeds. In a related complaint, the SEC also charged Robert Stewart's trading partner, Richard Cunniffe, who cooperated in the investigation.”