United States Attorney – LawFuel.com –
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that BONNIE J. HOXIE
pled guilty today to fraud charges related to her participation
in an insider trading scheme in which HOXIE, an assistant to a
top executive at the Walt Disney Company (“Disney”), and her coconspirator,
YONNI SEBBAG, a/k/a “Jonathan Cyrus,” obtained
confidential inside information, including about Disney’s
quarterly earnings, and attempted to sell the information to
buyers seeking to trade on it. HOXIE, 34, of Los Angeles,
California, entered her guilty plea today in Manhattan Federal
court before U.S. Magistrate Judge MICHAEL H. DOLINGER.
According to the Information to which HOXIE pled
guilty, the criminal Complaint previously filed in Manhattan
federal court, and statements made during the guilty plea
proceeding:
From March 2010 through May 25, 2010, HOXIE was
employed as a secretary to Disney’s Head of Corporate
Communications. In this capacity, HOXIE obtained material,
nonpublic information, including Disney’s quarterly earnings
statements (the “Inside Information”). Then, in violation of
HOXIE’s duties of trust and confidence, HOXIE disclosed the
Inside Information to SEBBAG, for the purpose of selling the
Inside Information to outside investors so that the investors
could trade in advance of the official public announcement of
Disney’s earnings.
As part of the scheme, letters were sent anonymously to
multiple hedge funds and other investment companies, many of
which were located in Manhattan, offering to sell the Inside
Information for purposes of illegal insider trading. Various
agents of the FBI, who were working in undercover capacities,
posed as hedge fund traders (the “Tippees”) and offered to buy
the Inside Information for purposes of trading in advance of the
public announcement of the Inside Information.
On May 8, 2010, three days in advance of the May 11,
2010, public announcement of Disney’s earnings for the second
quarter of 2010, HOXIE sent to SEBBAG a confidential document
titled “The Walt Disney Company Q2 Fiscal 2010 Key Topics
Speaking Points,” which contained a collection of talking points
that Disney executives referred to while answering analysts’
questions during the May 11, 2010, earnings call. This Inside
Information was, in turn, provided to the Tippees.
In addition, on May 11, 2010, roughly two hours in
advance of the public announcement, HOXIE and SEBBAG discussed
over email the procurement of additional Inside Information to be
sold to the Tippees. After obtaining additional Inside
Information from HOXIE, SEBBAG notified the Tippees that Disney’s
earnings per share would be 48 cents, which was better than what
stock analysts had predicted.
* * *
HOXIE pled guilty to one count of conspiracy to commit
securities fraud and wire fraud and one count of wire fraud. The
wire fraud count carries a maximum sentence of 20 years in prison
and a maximum fine of $250,000, or twice the gross gain or loss
from the offense. The conspiracy count carries a maximum
sentence of five years in prison and a maximum fine of $250,000,
or twice the gross gain or loss from the offense.
HOXIE is scheduled to be sentenced by U.S. District
Judge ALVIN K. HELLERSTEIN on December 21, 2010.
Manhattan U.S. Attorney PREET BHARARA said: “Today,
Bonnie Hoxie admitted to playing with a stacked deck by selling
valuable Disney secrets to make a quick buck. This Office will
continue to work with the FBI and the U.S. Securities and
Exchange Commission to prosecute individuals who commit insider
trading and jeopardize the integrity of our financial markets.”
Mr. BHARARA praised the work of the FBI. He thanked
the U.S. Securities and Exchange Commission for its assistance in
the investigation.
This case was brought in coordination with President
BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which
Mr. BHARARA serves as a Co-Chair of the Securities and
Commodities Fraud Working Group. President OBAMA established the
interagency Financial Fraud Enforcement Task Force to wage an
aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes
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representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective
punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities
and Commodities Fraud Task Force. Assistant U.S. Attorney JULIAN
J. MOORE is in charge of the prosecution.
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