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New York
Jury: Investment banker guilty of insider trading

NEW YORK (AP) - A Yale-educated investment banker was convicted of insider trading charges Wednesday after a jury concluded he gave tips about mergers and acquisitions to his father, enabling over $1 million in illegal profits.

Sean Stewart, 35, testified during the two-week Manhattan federal court trial, insisting he had no idea his father was sharing secrets with a broker to make trades ahead of public announcements on five separate deals that he oversaw while working at JPMorgan Chase & Co. and Perella Weinberg partners LP.

As the verdict was read, Stewart was stoic, though he turned to look at his mother on a bench behind him. Sentencing was set for Feb. 17.

Stewart's lawyer, Mark Gombiner, said the defense was damaged when Judge Laura Taylor Swain ruled that Stewart's father could use the Fifth Amendment to avoid testifying.

"We have a lot of issues on appeal," he said. Prosecutors did not immediately comment.

The father, Robert Stewart, was sentenced to one year of home detention after pleading guilty to an insider trading charge.

Prosecutors said evidence, including the timing of pivotal meetings regarding the corporate deals and subsequent trades in securities by the father and communications between the father and son soon afterward, made it obvious the son tipped his father intentionally.

The father received about $150,000 while the stock broker got the rest of $1.1 million in profits, though prosecutors say the son benefited when his father used some of proceeds to pay for Stewart's wedding rehearsal dinner and for a wedding photographer. Richard Cunniffe, who executed some of the securities trades for Stewart's father, pleaded guilty to insider trading charges and testified at the trial.

The effort to show Sean Stewart received something in return for sharing secrets was important after the 2nd U.S. Circuit Court of Appeals in December 2014 changed the landscape of insider trading law by saying prosecutors needed to show that the person supplying secrets received something of value in return. Stewart's trial was the first to occur in Manhattan since that ruling.

Testifying over two days, Stewart insisted he did nothing wrong, though he acknowledged breaking the rules of his employers when he talked openly and casually about secret deals with his family. He said he never told his father the dates that mergers would occur or the size of the deals, though he said he told his father that the timing of one of the deals conflicted with his scheduled spring 2001 wedding date.

Prosecutors said the father traded based on information he received from his son about four additional mergers afterward.

Throughout the trial, defense lawyers blamed the father.

3 years for ex-prosecutor who solicited sex

NEW ORLEANS (AP) - A former Louisiana prosecutor was sentenced Wednesday to three years for obstructing justice, though prosecutors accused him of soliciting sex from women in exchange for favorable treatment.

Seventy-three-year-old Harry Morel was sentenced in federal district court. The judge also gave him a $20,000 fine.

Judge Kurt Engelhardt announced the sentence prior to asking whether anyone wanted to speak on Morel's behalf, saying no statements would have made a difference in the sentence.

Engelhardt also said Morel would be on supervised released for a year once he is released from prison. The judge said he would leave it up to the Federal Bureau of Prisons to determine where Morel will serve the time.

Morel was district attorney for 33 years in St. Charles Parish, about 20 miles west of New Orleans.

At a news conference when his plea agreement was announced in April, prosecutors and investigators called him a sexual predator. But he was never charged with a sexual crime.

U.S. Attorney Kenneth Polite said that was because time limits had passed on some crimes, and prosecutors faced both significant problems with evidence and victims whose personal histories might lead jurors to doubt them.

And a key witness was dead.

Defense attorney Ralph Capitelli has accused prosecutors of a smear campaign to influence sentencing.

The FBI began investigating Morel in April 2010, after a woman accused of drunken driving called 911 and accused him of sexually assaulting her at her home.

Agents wired Danelle Keim for video. Authorities say one video shows him coming to Keim's house with two bottles of wine, discussing her case, and then starting to grope her.

But Keim died of a drug overdose in 2013, less than 24 hours after The Times-Picayune newspaper reported that the FBI was investigating whether Morel had been trading leniency for sex with defendants or their relatives.

Morel's guilty plea admitted to telling Keim to destroy photographic evidence of their meetings.

Keim's sister, Tessie Keim, spoke in the hall outside the courtroom on Wednesday and said she had conflicting feelings about the three-year sentence.

Tessie Keim said justice was not served because Morel "didn't get charged with what he should have been."

But she said her family also is excited that he got any prison time and is happy that the judge gave him the maximum.

Mental tests next for man accused in beheading case

NORMAN, Okla. (AP) - A judge in Oklahoma refused Wednesday to accept a guilty plea from a man accused of beheading a co-worker at a food processing plant in 2014, instead ordering another mental evaluation.

Cleveland County District Judge Lori Walkley said she wouldn't accept the plea from Alton Nolen, who has said he wants the death penalty for the attack at Vaughan Foods in Moore, because Nolen is not mentally competent enough. He will go to the state mental hospital for more tests.

Nolen is charged with first-degree murder in the beheading of Colleen Hufford, 54, at the plant shortly after he was suspended from the company for making racial remarks. He was also accused of stabbing and wounding another co-worker before a company executive shot him.

"They're entitled to justice," Walkley said of the victims and their families. "While it may not be swift, it will be sure."

The victim's daughter, Kelli Hufford, said in a statement that "justice was not served."

"The level of disappointment my family and I are experiencing at this moment is almost incomprehensible," she said. "Giving this monster any more time on this earth rather than charging him and sentencing him to the death penalty for killing my mother is inexcusable."

Nolen's defense attorneys have argued that he is mentally ill and unable to cooperate with them. At a hearing last week, a neuropsychologist testifying for the defense said Nolen is schizophrenic.

District Attorney Greg Mashburn told Oklahoma City television station KFOR Wednesday that he hopes there won't be much delay due to the new round of tests ordered.

Published: Thu, Aug 18, 2016