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Source: Securities and Exchange Commission

Litigation Release No. 24867 / August 13, 2020

Securities and Exchange Commission v. Sean R. Stewart et al., No. 1:15-cv-03719 (AT) (S.D.N.Y. filed May 14, 2015)

United States v. Sean Stewart, No. 15-cr-287 (S.D.N.Y.)

On August 12, 2020, the U.S. District Court for the Southern District of New York entered a final consent judgment against a New York investment banker charged with conducting a serial insider trading scheme.

The SEC alleged that Sean R. Stewart illegally tipped his father about future mergers and acquisitions involving clients of two investment banks for which Stewart worked. The complaint further alleged that Stewart’s father, Robert K. Stewart cashed in on the tips by placing trades himself and by recruiting a partner to place trades ahead of the public announcement of these corporate transactions, generating approximately $1.1 million in illicit proceeds. In a related complaint, the SEC also charged Robert Stewart’s trading partner, Richard Cunniffe, who cooperated in the investigation.

Stewart, Robert Stewart, and Cunniffe were also charged criminally for their alleged conduct. Stewart was found guilty by a federal jury of securities fraud and was sentenced to two years’ imprisonment. Both Robert Stewart and Cunniffe pled guilty to criminal charges and agreed to settle the SEC’s civil charges against them.

The final consent judgment against Stewart permanently enjoins him from violating the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder.

The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

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