The U.S. Securities and Exchange Commission (SEC) and the FBI this week charged a former Walt Disney Co. employee and her boyfriend on allegations of insider trading.
Bonnie Hoxie, 33, a former executive assistant at the media and entertainment conglomerate, and another accomplice—Yonni Sebbag—were arrested this week in Los Angeles on charges of conspiracy and wire fraud.
Hoxie and her boyfriend Sebbag, 29, allegedly sent anonymous letters to Wall Street traders and other fund managers offering to sell insider information about Disney, specifically the company’s earnings prior to their press release.
The defendants sent more than 20 letters in March to hedge funds with non-public information related to the company’s fiscal second-quarter earnings for a fee.
Some hedge funds, upon receiving the information, alerted the SEC.
In a complaint filed by the SEC in the U.S. District Court in New York, the SEC alleged that Hoxie and Sebbag engaged in “a brazen scheme to sell material non-public information”
According to the SEC, Sebbag offered the information for $15,000 in one instance, and in another, tried to gain half of the expected trading profits. Hoxie was an assistant to a high-level Disney executive.
"Hoxie and Sebbag stole Disney's confidential pre-release earnings information and put it up for sale," said Robert Khuzami, Director of the SEC's Division of Enforcement in a statement. "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 Sebbag tried to sell the information to a FBI agent posing as a fund manager.
Sebbag allegedly told the agents “I can deliver 3 to 4 days before release [of public financial information]. I will email you the report as soon as I have it and you will wire transfer the money to my account,” he said, according to the SEC.
Sebbag emailed the agent a 107-page earnings document with confidential company information including talking points for executives on the quarterly conference call, as well as detailed information regarding the company’s financial performance and future prospects—all private information not available to the public.
Disney is headquartered in Burbank, Calif.