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

Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team
Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team

Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.

SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures
SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures

Paul Atkins has asked staff to solicit public comment on novel ETFs, pausing the clock on as many as 24 filings linked to the booming event contracts market.

Private capital's $1 trillion bet on the American retirement account
Private capital's $1 trillion bet on the American retirement account

From 401(k)s to retail funds, Deloitte sees private equity and credit crossing into mainstream investing on two fronts at once.

Advisor moves: Wells Fargo Advisors pulls in $9.6b in fresh talent during first half of May
Advisor moves: Wells Fargo Advisors pulls in $9.6b in fresh talent during first half of May

Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.

Why uncertainty is making behavioral coaching more valuable than ever
Why uncertainty is making behavioral coaching more valuable than ever

Markets have always been unpredictable. What has changed is the amount of information investors are trying to process and the growing role advisors play in helping clients avoid emotional decisions

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management