Disney secretary charged with insider trading

The FBI alleges that the woman and her boyfriend tried to sell advance copies of Disney's May earnings.

By Charley Blaine May 26, 2010 1:49PM
Updated: 2:10 p.m. ET

The executive assistant to Walt Disney's (DIS) head of corporate communications and her boyfriend were arrested in Los Angeles today on charges of insider trading tied to the entertainment giant.

Bonnie Hoxie and Yonni Sebbag are accused of trying to sell confidential information about Disney's quarterly earnings to a number of hedge funds. The Los Angeles Times said  Hoxie had worked for Zenia Mucha, Disney's head of corporate communications.
The information the pair allegedly tried to peddle also included purported tips on alleged efforts to sell the ABC television network to private equity firms. Before today, Disney's only discussion about ABC's future was a comment by CEO Bob Iger that he was taking a "hard look" at the network.

In a Disney statement this afternoon on the case, the company said, "The reference in the complaint to conversations regarding the ABC network were and are false."

Disney shares were up 3.5% to $33.45 today, the leading performer among the 30 Dow Jones industrials ($INDU).

Hoxie, 33, and Sebbag, 29, are each charged with one count of wire fraud and one count of conspiracy. Each faces a maximum sentence of 25 years in prison and a fine of at least $250,000.

A Securities and Exchange Commission complaint, filed in U.S. District Court in New York today, alleges that, in March, Sebbag sent anonymous letters to at least 33 investment companies, including "at least 20 hedge funds" in the United States and Europe, offering to sell "for a fee" copies of Disney's fiscal-second-quarter results before their May release. Walt Disney

Several of the hedge funds immediately contacted the SEC. The SEC and the FBI then set up up a sting operation.

The letter and subsequent e-mails and phone conversations between Sebbag and FBI agents posing as traders with hedge funds that trade millions of shares said the couple expected the buyers of the information to trade on it.

The FBI set up an undercover operation to contact the writer. Posing as employees of different hedge funds, they contacted Sebbag, who was using an alias. After a number of e-mail exchanges and phone calls, one FBI agent agreed to pay Sebbag $15,000. Another deal called for a 50-50 split of trading profits.

The idea was to deliver the results three or four days before their release so that the hedge funds could trade in Disney shares.

But the document that Sebbag obtained had only brackets where actual results would be found. The brackets would be filled in later. But it also contained detailed information about the performance of Disney's various business groups.

Sebbag later told his contacts, the complaint says, that he would have the results two to three hours before the release. But Hoxie couldn't deliver those either. But she allegedly was able to provide Sebbag with the earnings per share -- 48 cents.

Later, she allegedly put in her claim for the profits Sebbag expected to earn, pointing to a $700 Stella McCartney handbag on sale at Neiman Marcus.

The FBI agents paid Sebbag $15,000 in cash at a May 14 meeting in New York. Sebbag identified himself, said his girlfriend was a Disney employee working with him on the deal and added that he could provide more information, the complaint says. He also asked for advice on getting the money deposited offshore.

They also agreed to a future meeting with the undercover agents to discuss building their relationship. But they were arrested instead, the complaint says.

Would the scam have benefited the purported traders? Maybe. Disney closed at $35.76 on May 11 and climbed to $36.21 after the open, then fell back to $35.13.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.



Quotes delayed at least 15 min
Sponsored by:


There’s a problem getting this information right now. Please try again later.
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 shed less than a point, ending the week higher by 1.3%, while the Dow Jones Industrial Average (+0.1%) cemented a 1.7% advance for the week. High-beta names underperformed, which weighed on the Nasdaq Composite (-0.3%) and the Russell 2000 (-1.3%).

Equity indices displayed strength in the early going with the S&P 500 tagging the 2,019 level during the opening 30 minutes of the action. However, ... More


There’s a problem getting this information right now. Please try again later.
Sponsored by: