'There's no such thing as halfway insider trading': Prosecutors unload on former banker accused of leaking deal tips to his dad

Reuters / Brendan McDermid

• Sean Stewart, a former managing director at Perella Weinberg Partners, is being retried for insider trading. He stands accused of tipping off his father about pending mergers.
• During this trial, the jury won't hear a key tape that helped convict Stewart previously.
• A prosecutor in the case told the jury that trading successfully on healthcare mergers five times in a row is unlikely, Bloomberg reported.
• "There's no such thing as halfway insider trading," assistant US attorney Richard Cooper said to the jury.
• Read more on Markets Insider

Sean Stewart, a former managing director at Perella Weinberg Partners, is on trial for insider trading... again.

In 2016, Stewart was accused and convicted of tipping off his father - Bob Stewart - about pending mergers. His dad ended up trading on the information, and he and two associates ultimately pocketed $1.1 million. The younger Stewart ended up serving three years in prison for his involvement.

Then, in 2018, an appeals court overturned the decision, ruling that the judge should've let statements Bob made to the FBI be presented to the jury. The defense argues that those comments under cut the prosecution's case.

Now the case is being tried again. But this time around it's without a key piece of evidence: a tape of Bob saying his son chastised him for missing a chance to trade on insider information. US District Judge Jed Rakoff barred the evidence last week, calling the tape "a rambling series of disjointed statements," Bloomberg reported.

Stewart did not reap any profit from the trades, and his lawyers argue that he had no reason to lead an insider-trading scheme. They're instead calling the case a story of a father choosing money over his son, according to Bloomberg. Prosecutors argue that it doesn't matter that Stewart didn't profit, because he knew what the outcome would be.

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Over the course of a week, they brought phone records, emails, and more than a dozen witnesses to show that Sean's knowlegde of the mergers coincided with details that Bob shared with Mark Boccia and Richard Cunniffe, who both testified. Boccia was granted immunity from prosectution, and Cunniffe cooperated with the government.

"There's no such thing as halfway insider trading," assistant US attorney Richard Cooper said to the jury.

In his closing argument, assistant US attorney Samson Enzer told the jury that trading successfully on healthcare mergers five times in a row is like winning the lottery - more than once.

"Winning the lottery once takes astronomical odds, winning it five times -- that doesn't happen," Enzer said in his closing argument, according to Bloomberg.

Ultimately, the jury will decide whether Sean told his dad about the mergers with the intention that Bob would use that information to trade. They are scheduled to begin deliberating on September 23.