Staffer, boyfriend attempted to sell earnings secrets

By LARRY NEUMEISTER (AP) — An assistant to a top executive at Walt Disney Co. was arrested Wednesday along with her boyfriend on charges that they offered to sell secrets about the company’s financial picture to investment companies, authorities said.

Bonnie Hoxie, who had been a secretary to Disney’s head of corporate communications, was accused of conspiracy and wire fraud along with Yonni Sebbag, also known as Jonathan Cyrus.

Hoxie, 33, and Sebbag, 29, were awaiting an initial appearance Wednesday in federal court in Los Angeles, where they reside. It was not immediately clear who would represent them in court.

U.S. Attorney Preet Bharara said the case demonstrated that “the integrity of the securities exchanges can be compromised not only by top executives, but also by anyone entrusted with material, nonpublic information.”

Prosecutors said Hoxie obtained information such as Disney’s quarterly earnings before the results were publicly released and fed the information to Sebbag, who tried to sell the tips.

The government said the pair arranged for anonymous letters to be sent to dozens of hedge funds and other investment companies, many of which were located in Manhattan, offering to sell secrets.

In a statement, Disney said it was “fully cooperating with this investigation.” According to a Bloomberg News report, Sebbag allegedly asserted as part of his pitch to sell the information that Disney was in advanced talks to sell the ABC broadcast network to private investors. Disney in its statement refuted that claim: “The reference in the complaint to conversations regarding the ABC Network were and are false. “

FBI agents posed as hedge fund traders and offered to buy the information from Sebbag and Hoxie to trade in advance of the public announcement of the information, prosecutors said.

The government alleged that before Disney’s May 11 earnings report, the couple sent FBI agents a copy of a document titled: “The Walt Disney Company Q2 Fiscal 2010 Key Topics Speaking Points.” Prosecutors also said the defendants notified agents two hours before the public earnings announcement that Disney’s results would exceed stock analysts’ expectations.

Three days later, Sebbag met two undercover FBI agents in New York and accepted $15,000 in cash for the information, the government said. Prosecutors said he agreed to provide similar confidential information in the future in return for a 30 percent share of any profits from early trades.

If convicted, Hoxie and Sebbag each face up to 25 years in prison and fines of $250,000 or twice the amount that was gained or lost in the scheme.

George Venizelos, the acting head of the New York office of the FBI, said the majority of the hedge funds and investment companies that received the offers of inside information from the couple notified the FBI.

Want Entertainment News First? Sign up for Variety Alerts and Newsletters!
Post A Comment 0