Asia-Pacific

Two charged with Disney insider trading plot

(Agencies)
Updated: 2010-05-27 09:48

THE STING

It was unclear from the complaints what motivated the pair. According to the Securities and Exchange Commission complaint, Hoxie -- on the day she sent confidential earnings information -- told her boyfriend she had her eye on a $700 Stella McCartney designer handbag.

"Here is the bag you are going to get for me - thank," Hoxie was quoted as writing in an email with an attached photo of the item.

According to the complaint, Sebbag replied: "I may be able to (buy) u 2 of them, lol."

"In that case, I also love love these shoes," she is said to have responded.

The US Securities and Exchange Commission filed civil charges, saying the pair sent anonymous letters to US and European hedge funds, offering a pre-release of Disney second-quarter 2010 results in exchange for a fee.

The criminal complaint filed in Manhattan federal court in New York charged Hoxie, 33, and Sebbag, 29, with conspiracy and wire fraud in allegations of illegal insider trading. The charges carry a maximum possible sentence of 20 years' imprisonment should they be found guilty.

The case is being prosecuted in New York rather than in Los Angeles because the pair contacted several hedge funds in New York. Sebbag stayed at a Manhattan hotel during a trip to collect payment for the sale of the confidential information about Disney, the complaints said.

At that meeting on May 14 with two putative traders, in reality FBI agents, Sebbag was paid $15,000 in cash.

Sebbag, with an envelope containing $15,000 in his grasp, revealed his true identity to the supposed traders and discussed building their relationship by providing more confidential Disney information in future, the complaints said.

According to a recording of the meeting, Sebbag told the undercover FBI agents his source at Disney was an assistant to one of the top five executives at the company. He said she had access to emails about sensitive business information.

"It's not (a one-time deal)," Sebbag said, according to the criminal complaint. "For as long as (the Tipper) is in place, we're continuing. And I'll make sure that that person stays in place, in her position ... because some chunk of my money, I'm going to give it to her."

The case is USA v Bonnie Hoxie et al, US District Court for the Southern District of New York No. 10-mag-1113.