On August 12, 2020, a final consent judgment was entered in the US District Court for the Southern District of New York against Sean R. Stewart, enjoining the former managing director of an investment bank 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 consent judgment follows a May 2015 complaint in which Stewart and his father, Robert Stewart, were charged by the SEC with conducting a serial insider trading scheme that generated $1.1 million over the course of four years. The complaint describes Sean Stewart’s method of tipping his father with nonpublic information about anticipated corporate acquisitions by means of coded email messages, and the father’s efforts to conceal his connection to the trades he made on the basis of the inside information. The elder Stewart and his trading partner, Richard Cunniffe, pleaded guilty to criminal charges stemming from this conduct, and both agreed to settle the SEC’s civil charges against them.
Sean Stewart was convicted of securities fraud on retrial in September 2019 in a parallel action by the US Department of Justice. He was sentenced to two years’ imprisonment.