Corporate assistant, boyfriend's failed earnings scheme
Beware the assistant with the shady boyfriend and a taste for expensive shoes.
On Wednesday, the SEC charged the assistant to Disney corporate communications head Zenia Mucha with fraud in an insider-trading scheme gone horribly awry. The feds arrested Bonnie Jean Hoxie and her boyfriend, Yonni Sebbag, after a sting operation allegedly uncovered their scheme to offer insider information to hedge funds.
The duo were charged in the U.S. District Court of the Southern District of New York in a case that had Hollywood buzzing over the supposed insider dish that Disney was exploring a sale of ABC — which Disney denied — and the possible negative ramifications for proposed movie derivatives trading.
Hoxie, who worked for Mucha for about two years, was released on bail later in the day and ordered to appear June 3 at a hearing in New York; Sebbag was held without bail.
In their misbegotten scheme, the duo allegedly contacted more than 20 hedge fund companies in early March with an offer to trade insider info about the Mouse House for cash. Sebbag was point man for the moneymen and Hoxie the conduit for insider info.
As detailed in the complaint, however, they operated more like bumbling criminals in “Home Alone” rather than sophisticated double crossers out of a James Bond movie.
Notified by hedge fund companies about the scheme, the feds proceeded to set up a sting. In emails to FBI agents posing as hedge fund operators, Sebbag promised info about Disney’s second-quarter earnings three to four days before the company filed released them on May 11, and suggested they could establish an ongoing relationship.
“I will email you the report as soon as I have it and you will wire transfer the money to my account after you get ahold of it,” he allegedly wrote [sic]. “Also, i am looking to build a strong business relationship with you for future quarters and information.”
Sebbag, who used the alias Jonathan Cyrus in this scheme, wanted $15,000 for this info, suggesting $30,000 would be even better “as I hope you will make a killing from Q2 earnings.”
He suggested that the hedge fund companies split their spoils from insider trading 50-50. But Hoxie wasn’t able to get the info to Sebbag as early as anticipated, leading to anxious email exchanges between the two in which she urged him to call on his inner Buddhist and chill out.
She finally got the info to her co-conspirator a few hours before Disney issued its earnings, and Sebbag in turn offered them to the supposed traders. At that time, he correctly told the feds that the earnings per share would be 48 cents.
Meanwhile, Hoxie, who signed a confidentiality agreement with Disney as part of her employment agreement, was gloating over all the finery they could buy with their illicit coin.
She sent Sebbag an email with a picture of a Stella McCartney handbag available for $700 at Neiman Marcus, and suggested that he could thank her with that. When he joked he might be able to buy her two, she sent a picture of Stella McCartney shoes.
When Disney execs conducted their earnings call a few hours later, they cited performance figures that matched much of the information in the “Key Topics Document” that Sebbag allegedly provided to the undercover G-Men. Among the tidbits: per room spending at Disney hotels was up 8% over the prior year.
Sebbag was caught a few days later when he went to New York to collect his $15,000 payout. During that meeting, the feds say, he reiterated his desire to develop an ongoing insider trading relationship. He reportedly told the undercover agents that his girlfriend was secretary to a high-powered exec and had promised to secure documents in exchange for some of the coin.
During this meeting, Sebbag asked the traders for advice on how to set up an offshore account, stating that he didn’t want to go to jail. He left with $15,000 and promises of future assignations.
Instead, the feds arrested him and Hoxie on Wednesday. Disney insiders said virtually everyone at the Mouse House who dealt with Hoxie was surprised by the arrest.