Two Arrested in Disney Insider-Trading Scheme

A Walt Disney Co. employee and an associate were arrested in Los Angeles Wednesday for allegedly disseminating confidential financial information about the company as part of an insider-trading scheme, according to federal prosecutors in New York.

Disney employee Bonnie Hoxie and her friend, Yonni Sebbag, also known as Jonathan Cyrus, were named in a criminal complaint filed in U.S. District Court in New York, in which they were charged with conspiracy and wire fraud.

According to the Wall Street Journal:

The SEC alleges that Bonnie Jean Hoxie and her paramour attempted to sell Disney’s second-quarter earnings ahead of their official release. The method: the two sent as many as 20 hedge funds a letter offering to provide the earnings release for a fee. The text of the letter, contained in the SEC complaint, begins:

“Hi, I have access to Disney (DIS) quarterly earnings report before its release on 5/03/10. I am willing to share this information for a fee that we can determine later….My email is XXX I count on your discretion as you can count on mine.”

At one point, according to the Journal, Sebbag asked for a $20,000 fee from FBI agents who were posing as traders.

Hoxie and Sebbag were expected to make their initial federal court appearance after 2 p.m. Wednesday in downtown Los Angeles. Each faces a sentence of 25 years in prison and fines of $250,000 or more.

Copyright CNS - City News Service
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