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
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