The Government Threatened My Dad to Undercut My Defense, Insider Trader SaysBy
Sean Stewart was convicted of insider trading for M&A leaks
Father would’ve testified to clear him, Sean tells colleagues
Prosecutors bullied the father of a former Perella Weinberg Partners LP banker into not testifying in his son’s defense by threatening him with jail, the now-convicted insider trader wrote to his former colleagues.
Bob Stewart, who got probation after pleading guilty to trading on insider information he got from his son, wanted to testify for Sean Stewart but the government refused to give him immunity, Sean wrote in a Sept. 13 e-mail to his former co-workers at Perella Weinberg.
“My father wanted to testify that I had ABSOLUTELY NO idea what he was doing, and also explain other statements, but he was threatened with potential loss of his probation and potential jail time if he did,” Sean wrote in the e-mail, obtained by Bloomberg News.
While it’s standard for criminal defendants to seek a new trial after a guilty verdict, it’s unusual to so publicly protest a judge’s ruling. Sean, who is awaiting sentencing after his August conviction, has asked U.S. District Judge Laura Taylor Swain to throw out the jury’s verdict. If unsuccessful, his team plans to appeal to a higher court.
Part of his argument is based on the idea that Bob -- who shared Sean’s tips with a friend who became an informant for the government and testified against the son -- should have been allowed to speak in Sean’s defense without fear that his plea deal would be jeopardized.
Spokesmen for Perella Weinberg and U.S. Attorney Preet Bharara, whose office prosecuted the case, and Sean Stewart’s lawyers declined to comment on the e-mail. Jillian Berman, a lawyer for Bob Stewart, didn’t return voice-mail and e-mail messages seeking comment.
The elder Stewart pleaded guilty to trading on the illegal tips and was sentenced to four years probation, including a year of home detention and 750 hours of community service. Bob didn’t implicate his son in his guilty plea and his agreement with prosecutors didn’t require that he cooperate with the government against Sean.
Swain barred jurors from hearing statements Bob made after his arrest that were favorable to the defense. She also declined to force him to testify. He claimed he feared prosecution and pleaded his Fifth Amendment privilege against giving self-incriminating testimony.
At the trial, jurors heard testimony from Richard Cunniffe, the friend of the elder Stewart who cooperated with the government. They also heard in-person and phone conversations Cunniffe secretly recorded while working with the government. Most of the $1.4 million prosecutors claim was netted in the scheme went to Cunniffe, who has not been sentenced.
In addition to Cunniffe, jurors heard testimony from more than a dozen prosecution witnesses, including Mark Boccia, a restaurant owner in Queens, who testified that he traded on tips from Bob. Boccia was granted immunity from prosecution. Cunniffe is hoping to avoid prison in exchange for his cooperation.
The jury convicted Sean Stewart of nine counts, finding that he tipped his father to five health-care mergers he learned about at Perella Weinberg and previously at JPMorgan Chase & Co. He faces as long as 20 years in prison on the most serious charges, though he’ll likely get just a fraction of that when he’s sentenced Feb. 17.
“Obviously, if my Dad had the opportunity [to] testify and candidly address his recorded conversations and actions, it would have made for a very different trial,” Sean wrote in the e-mail.
But prosecutors said during the trial said Sean’s bid to put his father on the stand was nothing more than "gamesmanship," claiming Bob’s statement after his arrest was "riddled with demonstrable lies" and wouldn’t help clear Sean.
In his e-mail, Sean also expressed his love for his former career and apologized to his ex-coworkers, some of whom testified as prosecution witnesses, for putting the firm in a bad light.
"I hope it is clear that the manner in which I approached my work with clients, and in mentoring and developing others at PWP is completely inconsistent with the crime I was charged with and now convicted of," he wrote. "I lost the profession I loved, my reputation, my marriage, the relationship with my Dad, as a result of what has happened over the past year.”
The case is U.S. v. Cunniffe, 15-cr-00287, U.S. District Court, Southern District of New York (Manhattan).
— With assistance by Chris Dolmetsch