NEW YORK (AP) — An investment banker charged with teaming with his father to use inside information to make money in the stock market insisted from the witness stand Thursday that he never knew his father would make illegal trades.
"I am innocent," Sean Stewart said at his Manhattan federal court trial. "I never ever gave my father information expecting him to trade."
Prosecutors say Stewart fed Robert Stewart information about five pending mergers involving public health care companies, enabling him to work with a stock broker to earn $1.1 million illegally. During the four-year period from 2011 to 2015, Sean Stewart worked first for JPMorgan Chase & Co. and later at Perella Weinberg Partners LP.
Authorities said Robert Stewart got $150,000 and the broker got the rest, while the father passed along some winnings by paying for his son's 2011 wedding rehearsal dinner and a photographer. The father has pleaded guilty and was sentenced to a year of home detention.
Sean Stewart, 35, testified he had such a close relationship with his parents that he sometimes talked about work, including pending acquisitions that were supposed to be secret. He said earned less than $100,000 annually at JPMorgan after finishing at Yale in 2003, but had boosted his pay to about $500,000 by 2010, when he was made vice president.
"I spoke very freely with them. I know now that the consequences are severe," he said. "At the time, it felt completely natural to have these discussions."
He said he never told his parents they should not trade on any information they heard from him because it never occurred to him that they would do so.
He said he never told his father the price that a company would be sold for or when a sale would occur, answering "absolutely not" repeatedly when asked those questions about each deal.
The son testified he could not recall talking about some of the deals at all, though he conceded he must have because his father initiated stock trades with information he could not have gotten elsewhere.
Even on those deals, though, Stewart insisted he never would have mentioned the amount of money involved or the anticipated closing dates.
Assistant Federal Defender Martin Cohen had his client read aloud emails that showed Stewart had a close relationship with his parents as he got married in 2011, became a father in 2012, and coped with a troubled marriage that ended in divorce.
As he read aloud an email from his parents urging him to enter couple's counseling with his wife, Stewart got choked up. U.S. District Judge Laura Taylor Swain pushed a box of tissues his way.
Earlier, he said JPMorgan's compliance division questioned him about how his father's name ended up on a list of people who made suspicious trades after a merger and he lied, saying he had no idea. He said he confronted his father afterward, asking "why he'd do something so foolish, so stupid."
He said his father promised not to do it again.