The father of an Ivy League grad who went on to become a JPMorgan healthcare banker has pleaded guilty to participating in a years-long insider trading ring, the Justice Department announced Wednesday August 12.
Long Island resident Robert Stewart had to forfeit $US150,000 and faces five years maximum prison time.
Stewart’s son, Sean, allegedly tipped his father off about upcoming deals. The elder Stewart then passed on the tips to Cunniffe.
The duo made more than $US1 million on the trades. Stewart and Cunniffe would refrain from bringing up the trades over email or when speaking over the phone, and would often use golf-related code to discuss potential takeover targets.
Sean Stewart allegedly started tipping off his father about upcoming deals in early 2011, when he was a vice-president at JP Morgan.
Investigators said the first time Sean Stewart tipped his father off about a deal, Robert Stewart used proceeds to pay a portion of his son’s wedding expenses in 2011. The New York Times carried the wedding announcement.
Sean Stewart joined Perella Weinberg later that year, where he is alleged to have continued to pass on inside information. The most recent instance of insider trading was connected to the October 2014 acquisition of healthcare company CareFusion Corp. by Becton, Dickinson & Co., according to the SEC announcement.
Sean Stewart turned himself in to investigators in May, and charges against him are still pending.
A representative at Perella Weinberg declined comment when contacted by Business Insider.
The elder Stewart relayed to Cunniffe in a taped conversation earlier this year that his son once chastised him for not making an inside trade, saying to him: “I can’t believe I handed you this on a silver platter and you didn’t invest in it.”