Former Professional Trader Agrees to Settle with SEC in $1.1 Million Insider Trading Scheme

Litigation Release No. 24215 / July 25, 2018

Securities and Exchange Commission v. Richard T. Cunniffe, No. 1:18-cv-06667 (S.D.N.Y. filed July 25, 2018)

United States v. Richard Cunniffe, No. 15-cr-287 (S.D.N.Y.)

The Securities and Exchange Commission has charged a former professional trader with allegedly participating in a serial insider trading scheme with an investment banker and his father that generated $1.1 million in illicit profits.

According to the SEC's complaint, Robert Stewart recruited his friend, defendant Richard T. Cunniffe to place trades based on inside information that Robert received from his son, Sean Stewart, an investment banker. Cunniffe allegedly cashed in on those tips by placing trades for himself and Robert. The SEC's complaint charges Cunniffe with violating antifraud provisions of the federal securities laws. Cunniffe, who cooperated in the investigation and previously pled guilty to criminal charges, has agreed to settle the SEC's civil charges against him. The settlement, which is subject to court approval, orders injunctive relief, disgorgement and interest, but no penalty. The SEC barred Cunniffe from the securities industry based on his guilty plea.

The SEC previously charged Sean Stewart and Robert Stewart in a separate complaint, and obtained a final judgment against Robert Stewart, who also pled guilty to criminal charges. The SEC's action against Sean Stewart is pending and seeks permanent injunctions, disgorgement of ill-gotten gains plus interest, and civil penalties.

The SEC's investigation was conducted by David W. Snyder and John S. Rymas. The case was supervised by Joseph G. Sansone, Kelly L. Gibson, and Assunta Vivolo. The litigation against Sean Stewart is being led by Jennifer C. Barry and Julia C. Green of the Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.