Hedge Funds Foil Disney Insider-Trading Scheme

May 27 2010 | 2:04pm ET

A former secretary at the Walt Disney Co. and her boyfriend have been arrested for allegedly trying to peddle insider information to hedge funds.

Unfortunately for Bonnie Hoxie and Yonni Sebbag, the 20 or so hedge funds—which were among 33 investment firms targeted by the pair—quickly turned the letters sent be Sebbag over to the authorities.

The offer came several days before Disney’s second-quarter earnings call, with Sebbag telling the firms he had access to the company’s earnings reports.

“Hoxie and Sebbag stole Disney’s confidential pre-release earnings information and put it up for sale,” SEC enforcement director Robert Khuzami said. “Fortunately, 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.”

Hoxie and Sebbag were arrested after the latter met with two undercover Federal Bureau of Investigation agents posing as hedge fund traders. Two hours before Disney reported its earnings, the two sent the FBI agents the results, with Sebbag collecting $15,000 from the agents on May 14. The two were arrested yesterday in Los Angeles.

Both face up to 20 years in prison if convicted of the conspiracy and wire fraud charges. Sebbag has been ordered held without bail, while Hoxie was freed on $50,000 bond.

Sebbag allegedly told the FBI agents that he hoped to “build a business relationship” with them and was “willing to provide them with non-public information on a regular basis,” the SEC complaint alleges.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Is Steven Cohen Going to Buy the Brooklyn Nets?

Jan 19 2015 | 6:49am ET

Rumors that Steve Cohen was interested in the Brooklyn Nets emerged after Scott...

Guest Contributor

Investors Benefit From Evolution Of Fund Of Hedge Funds Model

Jan 22 2015 | 12:27pm ET

The evolution of the fund of hedge funds model over the last few years represents...

 

Editor's Note