Litigation Release No. 23620 / August 18, 2016

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

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

Defendant in SEC Insider Trading Action Found Guilty by Federal Jury in a Related Criminal Case

On August 17, 2016, a jury in federal court in Manhattan returned a guilty verdict on all nine counts against former investment banker Sean R. Stewart in a criminal trial prosecuted by the U.S. Attorney's Office for the Southern District of New York. The jury convicted Sean Stewart of insider trading and related charges. He is presently scheduled to be sentenced on February 17, 2017.

On May 14, 2015, the SEC charged Sean Stewart with insider trading, and the criminal case is based on similar conduct underlying the SEC's action. The SEC's complaint alleges that, in a scheme spanning at least four years, Stewart illegally tipped his father, Robert K. Stewart, about future mergers and acquisitions involving clients of two investment banks where Sean Stewart worked. The complaint alleges that his father, a certified public accountant, cashed in on the tips by placing and directing highly profitable securities trades ahead of the public announcement of these corporate transactions, generating approximately $1.1 million in illicit proceeds. On August 12, 2015, Robert Stewart pled guilty to conspiracy to commit securities fraud.

The SEC's action, which remains pending, seeks an injunction against Sean Stewart and Robert Stewart from further violations of the charged provisions of the federal securities laws, disgorgement of ill-gotten gains, civil penalties, and an officer and director bar against Robert Stewart.

The SEC thanks the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation for its efforts in prosecuting the case, and the Financial Industry Regulatory Authority for its assistance in this matter.

For further information, see Press Release No. 2015-90 (May 14, 2015).