U.S. charges Perella Weinberg banker, father for insider trading

By Nate Raymond

NEW YORK (Reuters) – U.S. authorities brought criminal charges on Thursday against an investment banker at Perella Weinberg Partners and his father for allegedly engaging in insider trading ahead of five healthcare mergers.

Sean Stewart, who previously worked at JPMorgan Chase & Co, tipped off Robert Stewart, his father, about the mergers, enabling him and a business associate to make $1.16 million, according to a criminal complaint filed in Manhattan federal court.

Robert Stewart, 60, was arrested on Thursday morning in New York, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan said. Sean Stewart, 34, is not in custody, she said.

Lawyers for the Stewarts did not immediately respond to requests for comment.

The case marked the latest in a string of insider prosecutions under Bharara since he took office in 2009 resulting in convictions against more than 80 people.

The criminal complaint did not identify Perella Weinberg or JPMorgan by name, but they could be ascertained from Sean Stewart’s LinkedIn biography and in records maintained by the Financial Industry Regulatory Authority.

Representatives for Perella Weinberg, which he joined as a managing director in 2011, and JPMorgan, where he was previously a vice president, did not immediately respond to requests for comment.

According to the complaint, Sean Stewart routinely tipped his father about mergers that the two banks were advising on in exchange for benefits including $10,000 for his 2011 wedding.

At JPMorgan, those mergers included INC Research’s [INCRR.UL] 2011 acquisition of Kendle International Inc, and Apax Partners’ buyout that year of KCI Concepts Inc.

At Perella Weinberg, the deals included Hologic Inc’s acquisition of Gen-Probe Inc in 2012, Linde AG’s purchase of Lincare Holdings Inc that year, and Becton, Dickinson & Co’s deal for CareFusion Corp in October.

Robert Stewart traded ahead of those healthcare deals being made public, as did one of his friends and business associates, the complaint said.

The friend, who is not named in the court papers, pleaded guilty on May 12 and is cooperating with authorities, according to complaint.

The complaint charges the Stewarts with nine counts including conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud and securities fraud in connection with a tender offer.

The case is U.S. v. Stewart, U.S. District Court, Southern District of New York, No. 15-mj-1634.