The Stewart prosecution is a polarizing case of Wall Street secrets tangling with family dynamics. Stewart is accused of leaking confidential information on five health-care mergers to his father, who traded on the tips he received from 2011 to 2014, making a $150,000 profit. Bob got probation after he pleaded guilty.
In court on Monday, prosecutors focused on Stewart’s alleged repeated policy violations and willful neglect. Even after his former employer JPMorgan Chase Inc.’s compliance officers brought his father’s early trades to his attention, Stewart lied to throw regulators off the trail while he continued passing merger information to Bob, according to the government. Despite coming out of the scheme emptyhanded, Stewart provided the tips as a way to “help his father without reaching into his own pocket,” prosecutors said.
Stewart testified in his own defense at the first trial, claiming his father betrayed him by trading on information he had picked up during informal family chats. His lawyers sought to have Bob testify at the trial but failed to do so after the government refused to give Bob immunity from prosecution.
“My father wanted to testify that I had ABSOLUTELY NO idea what he was doing, and also explain other statements, but he was threatened with potential loss of his probation and potential jail time if he did,” Stewart wrote in an email to former colleagues following his conviction.
His father’s testimony could have cleared Stewart, or at the very least contradicted prosecutors’ arguments, according to an appeals brief filed by Stewart’s lawyers. The absence of it was all part of prosecutors’ effort to limit rebuttals as they relied on “dubious hearsay,” according to the brief.
The “silver platter” evidence was a crippling blow to the defense. One smoking gun led to another when prosecutors argued that Stewart benefited from passing the tips, claiming his father used $10,055 to pay for a photographer at his son’s wedding in 2011. Stewart’s lawyers argued that’s just what dads do for their sons, and presented evidence to show Bob paid similar expenses for Stewart’s younger brother Ryan when he got married.
The question of what Stewart got out of the deal initially divided jurors contemplating the case. After five days of deliberations, they agreed he benefited, and that was enough to convict him.
This article provided by Bloomberg News.