Sean Stewart told jurors he lied to JPMorgan Chase & Co. compliance lawyers in 2011 to protect his father and avoid a black mark on his own professional reputation.
Stewart, 35, is charged with passing tips on five health-care mergers to his father, Bob Stewart, from 2011 to 2014. He testified Monday in his insider-trading trial that he lied when he told lawyers that he hadn’t given his father any information about Kendle International Inc. Instead, Stewart testified, he often talked about work with his father and other family members, never thinking the information would be used to make trades.
“I did not want to get in trouble,” he said on cross-examination by Assistant U.S. Attorney Brooke Cucinella. “I did not want my father to get in trouble.”
“You lied to the people that were sitting right across from you, right?” Cucinella asked.
“I did,” Stewart said.
He testified that he was questioned by the compliance staff after his father’s name showed up on a Financial Industry Regulatory Authority list of people who traded in Kendle stock around the time the acquisition by INC Research LLC was announced. At an August 2011 meeting at the Yale Club in Manhattan, Sean said, he confronted his father about the trades.
Risky Move
Stewart was questioned in Manhattan federal court for an hour and a half Monday, his second day on the witness stand. He testified in a risky move to convince jurors that he was unaware his father was using information gleaned from discussions about work, the family and other matters.
“My dad made some terrible mistakes,” Sean Stewart testified. “He used me.”
Sean Stewart left JPMorgan Chase for Perella Weinberg Partners LP in October 2011, where he continued providing tips to his father, according to prosecutors. Sean testified that the elder Stewart had promised never again to trade on information his son acquired at work.