A former Wall Street banker and North Merrick native was sentenced Friday to three years in federal prison for insider trading for tipping off his father and a co-defendant to information about five health care company mergers and acquisitions before they were publicly announced.
Sean Stewart, 35, the former vice president in the Healthcare Investment Banking Group at JP Morgan Chase, was convicted last year of insider trading and other charges following a trial at Manhattan federal court.
“As proven at trial, Sean Stewart used his position as an investment banker to feed confidential inside information about clients to his father so that he could profit illegally from well-timed trades,” said Preet Bharara, the U.S. Attorney for the Southern District of New York.
Prosecutors said Stewart tried to cover-up his scheme, which earned his father Robert Stewart, and colleague Richard Cunniffe more than $1 million, beginning in 2011.
Stewart asked for Cunniffe to help in the scheme after Sean was concerned that Robert was “too close to the source,” authorities said. Cunniffe agreed, and also bought stocks based on the information, according to investigators. Cunniffe later became a cooperating witness for the prosecution.
Judge Laura Taylor Swain also sentenced Sean to three years of supervised release, which includes one year of home detention. She will set a restitution amount at a future date.
Robert pleaded guilty in 2015 to conspiracy to commit securities fraud and fraud in connection with a tender offer. He was sentenced to four years of probation, with the first year to be served in home detention and $150,000 in forfeiture.
Cunniffe pleaded guilty in 2015 to conspiracy to the same charges as Robert, plus charges of conspiracy to commit wire fraud and securities fraud.