Managing Director Of Investment Bank Found Guilty Of Insider Trading Charges

  Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SEAN STEWART, a former Managing Director at an investment advisory firm headquartered in Manhattan, was found guilty of providing inside information to trade and cause another to trade in the securities of five different health care companies, the acquisitions of which were announced between 2011 and 2014.  He was convicted after trial before U.S. District Judge Laura Taylor Swain.                                                

Manhattan U.S. Attorney Preet Bharara said:  “Another insider trading defendant stands convicted after trial by jury.  Time and time again, Sean Stewart took his clients’ most sensitive corporate secrets and fed them to his father on a silver platter for quick and illegal profits.  Insider trading rigs the securities markets in favor of cheaters, and we will continue to investigate and prosecute this crime aggressively.”           

According to the allegations contained in the Indictment as well as the evidence presented during trial:

In early 2011, SEAN STEWART, who at the time held the position of Vice President in the Healthcare Investment Banking Group of a global bank headquartered in Manhattan (“Investment Bank A”), began tipping his father, Robert Stewart, with material nonpublic information about upcoming mergers and acquisitions, including with the names of the companies that were acquisition targets, both when the target was an Investment Bank A client and when the bank represented the acquirer, as well as with information that indicated the likely timing of an upcoming deal. 

The first of these deals involved the acquisition of Kendle International Inc. by INC Research, LLC, which was announced publicly on May 4, 2011.  SEAN STEWART worked on the deal, representing Kendle.  Robert Stewart made about $7,900 in profits on purchases of Kendle stock executed in February and March of 2011.  When questioned by the Securities and Exchange Commission about his Kendle trades in May 2013, Robert Stewart reported that he used the proceeds of those trades to pay expenses related to SEAN STEWART’s June 2011 wedding.    

The second deal about which SEAN STEWART tipped Robert Stewart was the acquisition of Kinetic Concepts, Inc. (“KCI”) by Apax Partners, announced on July 13, 2011.  Although Robert Stewart purchased some stock in KCI based on SEAN STEWART’s tip, he sold that stock before the acquisition was announced, around the same time that SEAN STEWART learned the Financial Industry Regulatory Authority (“FINRA”) was conducting an inquiry into Robert Stewart’s Kendle trading. 

Also around this time, in the spring of 2011, Robert Stewart expressed a concern to co-conspirator Richard Cunniffe that Robert Stewart was “too close to the source” to be trading in KCI stock his own account, and asked Cunniffe to make purchases of KCI call options for Robert Stewart in Cunniffe’s brokerage account.  Cunniffe agreed to do so, and also mirrored for his own benefit the KCI trades that Robert Stewart was directing.

In connection with the FINRA inquiry, FINRA prepared a list of persons and entities that had traded in advance of the Kendle deal.  The list included Robert Stewart’s name.  When Investment Bank-A asked SEAN STEWART whether he knew anyone on the list, he initially denied recognizing the name of his father; later, when confronted by lawyers from Investment Bank-A, SEAN STEWART acknowledged that his father was on the list but told a series of lies designed to make it seem as if Robert Stewart had independently decided to invest in Kendle.  SEAN STEWART told these lies one day after meeting with his father to apprise his father of the FINRA inquiry and to get their stories straight. 

When the KCI/Apax Partners deal was announced, Robert Stewart and Cunniffe reaped profits totaling approximately $107,790.  At around this time, Robert Stewart told Cunniffe that the source of the KCI tip and the earlier Kendle tip had been Robert’s son.  Later, around the spring of 2012, Robert Stewart clarified for Cunniffe that the son in question was SEAN STEWART, who worked on the “sell side” on Wall Street.

In October 2011, SEAN STEWART left Investment Bank A.  A few months later, he joined an investment banking advisory firm headquartered in Manhattan (“Investment Bank B”) as a Managing Director.

During SEAN STEWART’s tenure with Investment Bank B, based on tips concerning nonpublic acquisition-related information supplied by SEAN STEWART, Robert Stewart had Cunniffe conduct options trading in advance of the public announcements of three more deals: (1) the acquisition of Gen-Probe Inc. by Hologic, Inc., announced on April 30, 2012; (2) the acquisition, by tender offer, of Lincare Holdings Inc. by Linde AG, announced on July 1, 2012; and (3) the acquisition of CareFusion Corp. by Becton, Dickinson & Co. (“Becton”), announced on October 5, 2014.  Investment Bank B represented Hologic in connection with its acquisition of Gen-Probe; Linde in connection with its acquisition of Lincare; and CareFusion in connection with its acquisition by Becton.  The profits that Robert Stewart and Cunniffe reaped from illegal insider trading in advance of the announcements of these three deals totaled over $1 million.  

During the course of the scheme, SEAN STEWART because aware that his father was having financial problems.  Rather than loan his father money, SEAN STEWART gave his father stock tips, the proceeds of which Robert Stewart used to benefit himself and his son.

In March and April of 2015, Cunniffe, who was then cooperating with the Government, recorded meetings he had with Robert Stewart.  During one such meeting, Robert Stewart accepted a payment of $2,500 cash from Cunniffe, which was the balance of the proceeds owed to Robert Stewart for profitable trading executed in Cunniffe’s account in advance of the CareFusion acquisition announcement.  Also during this meeting, Robert Stewart admitted that SEAN STEWART once chastised him for failing to make use of a tip, saying, “I can’t believe I handed you this on a silver platter and you didn’t invest in it.”              

SEAN STEWART, 35, of New York, New York, was convicted of one count of conspiracy to commit securities fraud and fraud in connection with a tender offer, one count of conspiracy to commit wire fraud, six counts of securities fraud, and one count of fraud in connection with a tender offer.  The securities fraud, tender offer fraud, and wire fraud conspiracy charges each carries a maximum prison term of 20 years.  The charge of conspiracy to commit securities fraud and tender offer fraud carries a maximum prison term of five years.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. 

Robert Stewart pled guilty on August 12, 2015, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer and was sentenced to four years’ probation, with the first year to be served in home detention, and $150,000 in forfeiture.

Richard Cunniffe pled guilty on May 12, 2015, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer, one count of conspiracy to commit wire fraud, three counts of securities fraud, and one count of fraud in connection with a tender offer.

Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  

A.G. Schneiderman Announces $1.1 Million Settlement With A Minnesota Pillow Retailer For Failing To Collect New York Sales Taxes

Tax Whistleblower Uncovers Failure By “My Pillow” To Collect Sales Tax On Millions Of Dollars In Sales To New York State Customers

   Attorney General Eric T. Schneiderman today announced a $1.1 million dollar settlement resolving a whistleblower case against My Pillow, Inc., a Minnesota corporation that sells pillows and other sleep-related products. The lawsuit alleged that My Pillow knowingly failed to collect and remit New York sales taxes on sales made to New York customers through its website and over the telephone. 

The action began when a whistleblower filed a complaint in state Supreme Court in Manhattan. Based on its investigation of the whistleblower’s allegations, the Attorney General’s Office contends that from 2011-2015, My Pillow failed to collect and remit approximately $537,000 in sales taxes on taxable sales made over the phone and through the Internet to New Yorkers. My Pillow was required to collect and remit sales taxes because the company sold products at trade shows in New York through independent contractors and other representatives, among other reasons.  The Attorney General’s Office claims that My Pillow knowingly made false records or statements concerning the sales taxes it was required to collect and remit. 

“Out-of-state companies like My Pillow cannot shirk their obligations to New York. Companies that fail to collect and remit applicable sales taxes harm the State and local governments—something that cannot be tolerated,” said Attorney General Schneiderman. 

This settlement is the latest tax-related recovery resulting from an action filed under the New York False Claims Act.  The Act is one of the state’s most powerful civil fraud enforcement tools because it allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government.  Persons found liable under the False Claims Act must pay treble damages, penalties and attorneys’ fees.  Under the False Claims Act, whistleblowers may be eligible to receive up to 30 percent of any money recovered by the government as a result of information they provide.  The whistleblower in this action will receive $221,800.00 from the settlement proceeds. 

Attorney General Schneiderman expresses his thanks to the whistleblower and its attorneys, and to the New York State Department of Taxation and Finance, for their assistance in bringing this case to resolution.

MAYOR DE BLASIO, COUNCIL SPEAKER MARK-VIVERITO, PARKS COMMISSIONER SILVER ANNOUNCE $150 MILLION IN FUNDING FOR FIVE ANCHOR PARKS

One large park in each borough to receive major capital upgrades like new soccer fields, comfort stations, running tracks, hiking trails

750,000 New Yorkers live within walking distance of these five major parks

   Today at St. Mary’s Park in the Bronx, Mayor Bill de Blasio, Council Speaker Melissa Mark Viverito, and NYC Parks Commissioner Mitchell J. Silver announced that the City will fund $150 million in major improvements at five large parks under the new Anchor Parks initiative. More than 750,000 New Yorkers live within walking distance of the five Anchor Parks, and the new investment will fuel the kind of major amenities needed more in these bigger parks, like new soccer fields, comfort stations, running tracks and hiking trails.

The Mayor and Speaker made the announcement at Saint Mary’s Park in the South Bronx, and were joined by Council Members from the four other anchor parks: Highbridge Park in Manhattan, Betsy Head Park in Brooklyn, Astoria Park in Queens and Freshkills Park on Staten Island.

“New Yorkers deserve to have the greatest parks in the world steps from their homes. That’s why our administration is focused on park equity, which brings fair access to and development of parks across the city. The Anchor Parks program, joined with the Community Parks Initiative and Parks Without Borders, marks another major step in advancing park equity for all New Yorkers,” said Mayor Bill de Blasio.

“I am proud to be part of a team announcing $150 million in capital improvements coming to parks in all five boroughs,” said Council Speaker Melissa Mark-Viverito. “Outdoor spaces like St. Mary’s Park are great equalizers for our city, and this funding makes it clear that every New Yorker, in every neighborhood, deserves access to quality outdoor spaces. I thank Mayor de Blasio and Council Members Mark Levine and Julissa Ferreras-Copeland for their engaged and collaborative work on the Anchor Parks Initiative and look forward to our continued partnership as we work to ensure every New Yorker in every neighborhood in our City has access to quality, open spaces.”

“We call these sites Anchor Parks because they provide a stabilizing, centering force for the communities they serve by offering larger and more diverse resources than smaller community parks. Now, New Yorkers in all boroughs have a once-in-a-generation opportunity to make their older parks new again,” said Parks Commissioner Mitchell J. Silver, FAICP.

Each of the Anchor Parks is slated for $30 million in major improvements. Each was selected based on historical underinvestment, high surrounding population and potential for park development. The Parks Department will commence community outreach beginning this fall to determine which improvements to pursue in each park.

These improvements to larger parks compliment the de Blasio Administration’s Community Parks Initiative, which has targeted more than 60 small neighborhood parks with improvements like new playground equipment, benches, plantings and resurfaced playing courts.

“Many happy hours have been spent playing in Betsy Head Park, enjoying this invaluable recreational space for the children and families of my beloved home of Brownsville,” said Brooklyn Borough President Eric L. Adams. “Unfortunately, this treasured open space – once a crown jewel of the New Deal-era parks renovated in New York City – has been shamefully allowed to deteriorate, depriving underserved families of a safe, comfortable place to play and enjoy the outdoors. Long-awaited capital improvements will dramatically improve the quality of life for Betsy Head Park’s patrons and visitors, many of whom cannot travel elsewhere for recreation, as well as will support my administration’s ongoing efforts to invest resources in neighborhood parks that have historically been neglected.”

STATE SENATOR GUSTAVO RIVERA, ASSEMBLYMEMBER VICTOR PICHARDO AND COUNCILMEMBER RITCHIE TORRES TO HOST ANNUAL BACK TO SCHOOL CELEBRATION AT TREMONT PARK

   State Senator Gustavo Rivera will host the second of three Back to School events on Friday, August 19th at Tremont Park. The last Back to School event will be held on Friday, August 26th at St. James Park. This event is co-sponsored by Assembly Member Victor M. Pichardo and Council Member Ritchie Torres

This event, which is part of Senator Rivera's Bronx CAN Health Initiative, will have a backpack giveaway, fun activities and free health screenings in an effort to help celebrate a healthy start to the upcoming school year. A limited number of backpacks will be available on a first-come, first-serve basis. Children between 5 and 13 years old need to be accompanied by an adult while youths between 14 and 18, do not need a parent present.

SCHEDULE OF BACK TO SCHOOL EVENTS:

1) What: Back To School Event

Who: State Senator Gustavo Rivera, Assembly Member Victor M. Pichardo and Council     Member Ritchie Torres.

When: Friday, August 19, 2016

            2:00 PM-5:00 PM

Where: Tremont Park (corner of E Tremont Avenue and Arthur Avenue)

2) What: Back To School Event

Who: State Senator Gustavo Rivera and Assembly Member Victor M. Pichardo.

When: Friday, August 26, 2016

            2:00 PM-5:00 PM

Where: St. James Park (entrance on Jerome Avenue and W 192nd Street)

Bronx Democratic Party's Annual BBQ & Family Day

The Punisher Comes to NYCC

October 6 - 9, 2016 | Javits Center

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Friends of Van Cortlandt Park - Hike, Eat and Drink with Friends- Hike-toberfest 2016

Get Your Tickets Now for
Hike-toberfest 2016
Saturday October 1st from 2pm to 7pm

Hike, Eat, Drink & Celebrate with Friends during our new fun fundraiser for the hiking trails of Van Cortlandt Park. 

Come see why VCP is Where NYC Hikes. 

Hikes start at 2pm: Hikers will have the option to go on a 4-5 mile hike throughout the park OR a 2 mile leisurely nature hike.  Both hikes will be led by Friends of Van Cortlandt Park Staff and take about 2 hours.  All registered participants will receive a VCP Where NYC Hikes t-shirts.    

Oktoberfest is from 4-7pm:  Attendees will receive a VCP Where NYC Mug, eat German Food by Loreleye Restaurant & Biergarten and enjoy local brews from the Bronx Brewery, Chelsea Craft Brewing Company, Gun Hill Brewing Company and Jonas Bronck Beer Co. served by the Bronx Beer Hall.  Special thank you to all the breweries for donating!  Yard games will be setup to challenge your friends as you hang out on the Van Cortlandt House Museum Lawn.

You can join us for just the Hike or the Oktoberfest or the entire Hike-toberfest Event!  Purchase your tickets in advance for a discount!

Hikes will start at and Oktoberfest will be held on the grounds of the Van Cortlandt House Museum- enter the Park at Broadway and W. 246^th Street.

FERNANDO FERRER ENDORSES MARISOL ALCANTARA FOR STATE SENATE OF ADRIANO ESPAILLAT

  Ferrer describes Alcantara’s integrity and character as key factors to having earned his support

   Today Former Bronx Borough President and 2005 Democratic Nominee for Mayor, Fernando Ferrer announced his support for Marisol Alcantara in the race for New York’s 31st State Senate District. Drawing comparisons to his own historical runs for office, Ferrer cited the importance of electing the first Dominican woman to the State Senate. In his endorsement of Marisol, Ferrer pointed to the temperament and judgement Marisol has displayed her entire life in building coalitions. "I am supporting Marisol because of her contributions as a leader in this community.  Those contributions have had a positive impact on the residents of the district, families, mothers, children - that is who this election is about.

"For me, this endorsement is a recognition of the values that Marisol brings to the table - a woman who didn't just show up in this community, but has been here fighting the important battles.  With regard to others, as President John F. Kennedy said many years ago: "Forgive your enemies, but don't forget their names."

In accepting Fernando Ferrer’s endorsement Marisol Alcantara said, “Fernando Ferrer means so much to the people of the City of New York.  Public service is an honor and privilege that I take seriously. I am honored to have earned Freddy’s endorsement, and will work hard every day to make the people of this District proud.  Freddy will be a resource for me on so many issues and I am thankful for his trust and friendship.”   

Fernando Ferrer is another endorsement this week alone as Alcantara continues to build momentum.   In addition to Fernando Ferrer, she was endorsed by the Democratic nominee for Congress, and current Senator Adriano Espaillat and City Councilmember Ydanis Rodriguez.  Yesterday Alcantara was endorsed by the Transport Workers Union Local 100.