Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
By Phyllis Diamond
Jan. 21 — Ex-Perella Weinberg Partners LP executive Sean Stewart lost his bid Jan. 19 to dismiss charges he tipped his father to inside information about pending mergers in the health-care sector.
The U.S. District Court for the Southern District of New York rejected Stewart's challenges to the indictment, including that the law of insider trading is unconstitutionally vague.
Stewart has more than enough information to prepare for trial and to “prevent unfair surprise, which is all that the law requires,” Judge Laura Taylor Swain said.
In May 2015, Stewart and his father Robert Stewart were charged civilly and criminally over their alleged involvement in a scheme in which Sean Stewart fed his father nonpublic information about upcoming mergers and acquisitions (94 SLD, 5/15/15). In August, Robert Stewart pleaded guilty to insider-trading conspiracy (156 SLD, 8/13/15).
In moving to dismiss the indictment, Sean Stewart argued that the Second Circuit's Newman decision left the law of insider trading unconstitutionally vague, and that the government's efforts to upset the ruling amounted to an acknowledgment that there was no clear guidance or practical application of the law.
The court disagreeing, calling the defendants' arguments “overblown, unfounded and unavailing.” The U.S. Court of Appeals for the Second Circuit “has soundly rejected the notion” that 1934 Securities Exchange Act Section 10(b) and Rule 10b-5 “have been construed so expansively as to fair to give fair warning of what conduct is prohibited,” the court said.
Sean Stewart was represented by Tai H. Park, Kathleen E. Gardner and Tami Stark, Park Jensen Bennett LLP, New York.
To contact the reporter on this story: Phyllis Diamond in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Jenkins at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)