Insider Trading is illegal.

Former JPMorgan Banker Caught for Insider Trading

Banker Accused of Insider Trading

A former JPMorgan Chase & Co. investment banker was convicted of insider trading after he was accused of passing confidential information to his father about certain deals not yet known to the public.

Sean Stewart is facing prison time plus home detention for his role in providing his father information on five separate deals between 2011 and 2015 involving Kendle International Inc., Kinetic Concepts Inc., Gen-Probe Inc., Lincare Holdings Inc. and CareFusion Corp.

Sean’s father, Robert Stewart, used a co-worker, Richard Cunniffe, to invest on his behalf. The two would then share the profits, which netted roughly $1.4 million in profits. Sean claimed that his father betrayed his trust by trading off information that came up in conversations about his job. The jury did not believe the younger Stewart, convicting him on all nine counts of insider trading-related charges.

The elder Stewart and Cunniffe also pled guilty, with the latter wearing a wire to a meeting with Robert Stewart, at which time Cunniffe gave him cash purporting to be the proceeds from a recent scam.

Sean Stewart also admitted to lying to JPMorgan compliance staff after his father was discovered on a list of names compiled by FINRA in connection with suspicious trading activity possibly related to insider trading.

Think You have Information on Insider Trading?

Despite what may seem to be innocent exchanges of information, trading on insider information not known to the public is illegal.

Call a Los Angeles Securities Attorney Today

If you have questions about information you’ve received or suspicious of insider trading, contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options.

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Solar panels from SunPower Corporation against a blue sky

SunPower Corporation Accused of Insider Trading

A solar panel maker found itself facing a lawsuit after being accused by investors of insider trading and making misleading statements to shareholders, causing its stock price to drop dramatically.

SunPower Corporation and two of its executives face charges stating that for nearly six months the company misled investors about its faltering financial outlook until it was forced to adjust downward, causing stock prices to fall 30 percent in one day.
Trustees of the police and fire retirement system of Warren, Michigan, brought the investor suit, claiming that the company’s misleading statements caused share prices to drop from $14.78 to $10.31, and accused the two executives of dumping $1.2 million in stock in advance of the company’s negative announcement.

According to the lawsuit, executives of SunPower Corporation knew or disregarded the negative factors impacting the company’s business prospects as early as the beginning of 2016, breaching their fiduciary duty to their shareholders by continuing to cast a positive light on their performance for several months.

On August 9, the company filed statements claiming that several “near-term challenges” were expected to impact their business and financial performance. Further bolstering the plaintiffs’ argument was a statement made by CEO Tom Werner, claiming they knew of the problems as early as May 2016. Company CFO Charles Boynton made statements as late as May, highlighting SunPower’s expectation of exceeding its financial forecast.

SunPower Corporation shareholders argue that despite executives’ rosy outlook, demand decreased while project completion timelines increased, and the company was preparing to downsize. More importantly, the projections are alleged to have kept stock prices artificially high, only dropping once the truth came out.

The suit seeks monetary damages and fees and for SunPower Corporation to reform its business structure. A separate class action was filed in August, which contains similar securities-related charges.

Call a Los Angeles Securities Fraud Attorney Today

If you invested in SunPower Corporation, or believe you have suffered a loss as a result of misstatements or omissions of fact made by a company that you own stock in, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles stock fraud attorney today for a consultation to discuss your rights and options.

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Front of the Supreme Court Building

Court Rules in Salman Insider Trading Case

In the first hearing on an insider trading case in nearly 20 years, the United States Supreme Court unanimously upheld a conviction for insider trading from tips received from the accused’s brother-in-law. The court ruled that traders can be held liable even if the insider didn’t receive a financial benefit for passing along the tip as long as the trader and the insider are friends or relatives.

The court rejected Bassam Salman’s argument that he couldn’t be convicted for passing along tips given by his future brother-in-law Maher Kara because he never received any benefit – a ruling that partially overturns the 2nd Circuit Newman decision, helping to settle a rift with the 9th Circuit. In the 9th Circuit, justices previously had ruled that prosecutors do not need to prove that a tipster received concrete benefits for passing along information as long as it can be proved that the beneficiary and the tipster were friends or related to each other.

Although the decision in the Salman insider trading case resolves the split between the 2nd and 9th Federal Circuits, the Court preserved the 2nd Circuit’s holding that traders must know that their information came from an insider. The ruling upholds the 1983 Dirks v. SEC decision that gifts of confidential information from business executives to relatives violate securities laws.

The court noted that there might still be circumstances where assessing liability for gifting information could be difficult (given the nature of the relationship in question), but declined to address “those difficult cases” in this ruling.

Call a Los Angeles Securities Attorney Today

Trading on insider information is a punishable offense, and both tipster and recipient alike can be prosecuted.

Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options if you have concerns trading based on information you may have received or are worried you may have disclosed to someone else.

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