It was an insider-trading case on a silver platter.
At least, that’s how it looked to the prosecutors. The FBI had an undercover recording of the father of Perella Weinberg Partners LP’s former managing director Sean Stewart saying his son chastised him for missing a chance to trade on inside information.
“I handed you this on a silver platter, and you didn’t invest,” Bob Stewart said his son told him, according to the tape.
The recording was a centerpiece of Sean Stewart’s 2016 trial, helping a jury convict him and resulting in a three-year prison sentence -- until an appeals court overturned the conviction. Prosecutors took their second stab at convicting Stewart on Monday, this time without the “silver platter” at their disposal.
U.S. District Judge Jed Rakoff last week barred them from using the crucial evidence, calling the hourlong recording “a rambling series of disjointed statements.”
Stewart’s lawyer Steven Witzel argued in opening statements Monday that there’s no evidence Stewart knew his father would trade on the information. Witzel portrayed his client as an investment banker on the rise, with no reason to get involved in a insider-trading scheme, let alone one in which he got no money in return. The conversations between him and his father were routine, and while Stewart made “a big mistake” discussing work and certain companies by name, it wasn’t a crime, Witzel told the court.
If anything, Bob “betrayed” his son to turn a profit as financial woes began to mount, he told the jury.
“Robert endangered Sean and destroyed his career,” Witzel argued. “The government has a mountain of evidence against three inside traders and nothing against Sean.”
Defense lawyers typically have an advantage in retrials, and they undeniably have the upper hand here, according to legal experts. Without the evidence that prosecutors hung their arguments on three years ago, the defense attorneys are now poised to attack even harder, said St. John’s University law professor Anthony Sabino.
“If that’s the best they could’ve thrown at Sean Stewart, now the defense has an opportunity,” Sabino said. “That’s a point of vulnerability.”