And off to jail they go: Disney duo arrested for attempted insider trading

Hedge fund managers in the U.S. and Europe did a good turn for the Securities and Exchange Commission, and helped uncover an attempt at insider trading involving an employee of Walt Disney & Co.
MAY 26, 2010
Hedge fund managers in the U.S. and Europe did a good turn for the Securities and Exchange Commission, and helped uncover an attempt at insider trading involving an employee of Walt Disney & Co. The SEC announced today it has arrested an administrative assistant at Disney and her boyfriend, who apparently sent anonymous letters in March to more than 20 hedge funds in the U.S. and Europe containing insider info about Disney's financials. In these letters, the duo offered an advance look at Disney's second-quarter earnings for a fee — in one case, a payment of $15,000 was suggested, and in the other they requested a portion of the trading proceeds. The hedge fund managers quickly alerted SEC investigators, who then worked with the Federal Bureau of Investigation in a sting operation to catch the culprits. The FBI arrested Bonnie Jean Hoxie and Yonni Sebbag today in California. “Multiple hedge funds reported the illicit scheme, and the SEC and criminal law enforcement authorities acted quickly to stop this brazen attempt to establish an ongoing insider-trading business,” Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement Had the hedge funds accepted Ms. Hoxie's and Mr. Sebbag's offer, it appears they would have gotten some valuable information out of the deal. The SEC complaint details that two days before Disney's earnings were to come out, Mr. Sebbag sent undercover FBI agents a document that Disney executives were going to use during the earnings conference call. Ms. Hoxie also learned the quarterly earnings per share, and provided it to an agent through Mr. Sebbag — about two hours before the earnings release was published. The sting operation continued up to the point of money changing hands. On May 14, an agent met Mr. Sebbag and gave him $15,000 in cash. Mr. Sebbag told the agent he wanted to “make a lot of money” out of the deal, and he also asked about how to set up an offshore account, the SEC complaint alleges. Mr. Sebbag and the agent planned to meet again so that the arrangement could continue. The initial contacts with the hedge fund managers were unsophisticated at best, according to SEC findings, which revealed snippets of e-mails from Mr. Sebbag in unedited form. "First of all, i am not a fed,” one read. “I have no way to prove it at this point but i am not asking you to disclose your identity not i will disclose mine. It is up to you to determine if this is worth the risk as i did. I work for Disney, that is all i can tell you." “I dont think we will get caught if we stay discrete and careful. You can count on my discretion as i am counting on yours…"

Latest News

RIA dealmaking accelerates as three firms hit AUM milestones
RIA dealmaking accelerates as three firms hit AUM milestones

Wealth Consulting Group, Coastline and Maridea report fresh capital, acquisitions and asset growth as advisor M&A keeps climbing

VastAdvisor closes $1 million SAFE round from advisor-side backers
VastAdvisor closes $1 million SAFE round from advisor-side backers

Carson Group's Dani Fava, Jason Pereira of Woodgate Financial, and Sally George of Convergency Partners led the raise as the growth-tech startup builds out its AI platform and leadership bench.

Wells Fargo adds three advisor practices as recruiting rebound continues
Wells Fargo adds three advisor practices as recruiting rebound continues

New teams from William Blair, Ameriprise and UBS bring more than $560 million in combined client assets to the firm's employee and independent channels.

UBS will pay advisors 'handsomely' for banking starting next year
UBS will pay advisors 'handsomely' for banking starting next year

Regulators this year approved UBS Bank USA’s conversion to a nationally chartered bank.

SEC accuses Tricolor executives of hiding $800 million collateral hole
SEC accuses Tricolor executives of hiding $800 million collateral hole

How a subprime lender’s car-loan bonds allegedly unraveled before bankruptcy.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income