U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23948 / September 28, 2017
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. Robert Stewart, No. 15-cr-287 (S.D.N.Y.)
SEC Obtains Final Judgment Against Former CFO in $1.1 Million Insider Trading Scheme
The Securities and Exchange Commission has obtained a final judgment against the former chief financial officer of a technology company and certified public accountant, who was charged, along with his son, with conducting a serial insider trading scheme involving tips of key nonpublic information in coded e-mail messages disguised as discussions about golf.
The final judgment, entered on September 27, 2017 by the Honorable Analisa Torres of the U.S. District Court for the Southern District of New York, permanently enjoins Robert K. Stewart from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, orders him liable for disgorgement of $153,675.65, which is the amount of illicit profits he earned as a result of the alleged illegal insider trading, plus $11,240.76 in interest, but provides that the disgorgement and interest obligation will be satisfied by the entry of a forfeiture order in the parallel criminal case. The final judgment also imposes a lifetime officer-and-director bar on Stewart.
Stewart, who pled guilty to criminal charges, also was suspended from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.
Stewart’s son, Sean Stewart, was found guilty by a federal jury of securities fraud and was sentenced to three years’ imprisonment. Sean Stewart has appealed his criminal conviction and the appeal remains pending. 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 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 criminal case against Robert and Sean Stewart, and the Financial Industry Regulatory Authority for its assistance in this matter.