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Disney Insider Trading, SEC Nabs Two Goofys (See Complaint)

Today, the Securities and Exchange Commission filed a complaint in U.S. District Court, Southern District of New York, alleging an insider trading scheme against a Disney employee and her boyfriend, involving quarterly earnings information for The Walt Disney Company (NYSE:…

By Douglas A. McIntyre
Published May 26, 2010, 12:22pm ET · 2 min read

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Today, the Securities and Exchange Commission filed a complaint in U.S. District Court, Southern District of New York, alleging an insider trading scheme against a Disney employee and her boyfriend, involving quarterly earnings information for The Walt Disney Company (NYSE: DIS).  The Complaint alleges that Bonnie Jean Hoxie, a secretary for a high-level executive, obtained pre-release results for Disney’s second quarter 2010 (“2Q-2010”) which her boyfriend, Yonni Sebbag later tried to sell to undercover FBI agents.

According to the complaint, in early May, at least 20 hedge funds received letters from an anonymous sender claiming to be able to obtain pre-release access to Disney’s earnings report and offering it prior to its public release in exchange for payment.
An example of one of the letter reads:
Hi, I have access to Disney’s (DIS) quarterly earnings report before its release on 05/03/10 [sic]. I am willing to share this information for a fee that we can determine later. I am sorry but I can’t disclose my identity for confidentiality reasons but we can correspond by email if you would like to discuss it. My email is [email protected]. I count on your discretion as you can count on mine. Thank you and I look forward to talking to you.
According to the complaint,the FBI agents set up an undercover operation and contacted the anonymous sender, presumably Sebbag, to express interest in such an arrangement. The FBI agents identified themselves as traders who had received the anonymous letters and were interested in receiving the Disney information in return for compensation.
Sebbag then sold the prerelease earnings to an undercover FBI agent, who posed as an investment manager.
It’s a surprise they got caught. Really.
Ashley C. Allen

Contact [email protected] for any questions or corrections.

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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