NEW YORK, N.Y. – Prosecutors attacked the credibility of an investment banker at his insider trading trial on Monday, dismissing his testimony as coming from someone willing to tell a “forest of lies” to hide that he tipped his father about public companies involved in mergers and acquisitions.
Assistant U.S. Attorney Brooke Cucinella went after Sean Stewart on cross-examination, repeatedly asking about lies as she sought to discredit the Yale University-educated 35-year-old, who was making nearly $1 million annually before his arrest last year.
She wanted to know if Stewart lied to JPMorgan Chase & Co., where he was a vice-president, when the company confronted him in 2011 over stock trades carried out by his father before two public companies merged. He said he did. She wanted to know if he persuaded his brother to lie about his nightlife so his wife wouldn’t get angry at him. He said he did. She asked if his father lied to the Securities and Exchange Commission. He said he did.
And she wanted to know if he lied when he promised to obey his bail conditions rather than drain money from an account put up as collateral. He said he did.
“I was shocked at the time,” Stewart said. “I had done nothing wrong.”
Later, Assistant U.S. Attorney Sarah McCallum took her turn during closing arguments to dissect Stewart’s claims that he had no idea his father would trade on information he divulged as part of his tight relationship with his parents.
She noted that Stewart’s father frequently bought stock or options in companies involved in five mergers or acquisitions soon after communicating with him and often after a major development in the deals.
“Five times the defendant handed his father tomorrow’s news today,” McCallum said, explaining how advanced knowledge of a merger would allow an investor to score a 20 per cent gain or more on the day the deal is announced.
The prosecutor said his testimony over two days revealed “a story totally at odds with the evidence in this case.”
She added: “The problem is the defendant’s story is false.”
As an example, she described Stewart’s lies to protect himself and his father when JPMorgan lawyers asked if his father learned about a merger from anything he said.
“The defendant told this forest of lies, and the devil was in the details,” she told jurors.
A month after the interview, Stewart went to work for Perella Weinberg Partners LP, turning down a promotion JPMorgan had offered for him to stay.
During a closing argument, defence lawyer Martin Cohen repeated the defence assertion that Stewart’s father, Robert Stewart, who has pleaded guilty and been sentenced to a year of home detention, was to blame.
“What he did is so horrible it’s hard to understand,” Cohen said.
When Sean Stewart testified earlier Monday, he blamed his father, saying he’d “made some terrible mistakes” and his actions had “resulted in the loss of my career and reputation.”