Ex-Disney staffer held for inside trades

[hobie16]

LOS ANGELES (MarketWatch) -- A former employee of the Walt Disney Co. [s:dis] has been arrested for trying to sell information on the entertainment giant's earnings, Dow Jones Newswires reported Wednesday. The ex-Disney staffer, Bonnie Hoxie, along with her friend, Yonni Seebag, were taken into custody by the FBI in Los Angeles, the reports said. Hoxie and Seebag allegedly tried to sell Disney's second-quarter earnings to hedge funds and investment companies prior to the report's release. FBI officials were not immediately available to confirm the arrests. Disney officials could not be immediately reached for comment.

CNBC says Hoxie stated Eiger is shopping ABC around to sell.

[DragonFox98]

Interesting.....

[GRUMPY PIRATE]

Well I know of two people that just made in onto Santa's "naughty list"!!

[hobie16]

If there is a Stupid Employee Tricks site, this woman will have her face embedded into the logo.

From the Wall Street Journal. Part 1

Federal authorities alleged Wednesday that a Walt Disney Co. executive assistant and her boyfriend engaged in a ham-handed plot to sell Wall Street traders inside information, first offered in a chirpy missive sent to dozens of investment companies.

"Hi, I have access to Disney's (DIS) quarterly earnings report before its release on 05/03/10," the March 5 letter began. "I am willing to share this information for a fee that we can determine later."

The alleged plan went awry. Instead of taking the bait, "multiple hedge funds reported the illicit scheme," the Securities and Exchange Commission said in a press release.

In a pair of complaints filed Wednesday, federal authorities said the letter and subsequent emails were sent by Yonni Sebbag, whose girlfriend Bonnie Hoxie was an assistant to Disney's head of corporate communications.

Disney said in a statement Wednesday that it "has been fully cooperating with this investigation." Ms. Hoxie was at work as recently as Tuesday, according to people at the company.

A federal judge ordered Mr. Sebbag held as a potential flight risk and released Ms. Hoxie on a $50,000 bond Wednesday. Neither responded to the charges in a bail hearing Wednesday.

The March 5 form letter was sent to 33 investment companies, according to a criminal complaint filed by the U.S. Attorney's office in Manhattan federal court charging the two with conspiracy and wire fraud. Undercover agents from the Federal Bureau of Investigation began corresponding with Mr. Sebbag, who used the pseudonym "Jonathan Cyrus" in the email exchanges, according to the complaint.

As the earnings release approached, Mr. Sebbag, 29 years old, and Ms. Hoxie, 33, engaged in an awkward exchange of their own as they waited with growing frustration for the quarterly earnings data to materialize, according to transcripts in both complaints. The exchange at points took on the tone of any couple bickering over mundane issues like bill paying.

"Get things moving with all the powers you have," Mr. Sebbag urged his girlfriend at one point.

"Thanks for the flattery," Ms. Hoxie replied. "I wish you could come to work every day with me."

On the day of the earnings release, Ms. Hoxie sent Mr. Sebbag an email stating "here is the bag that you are going to get for me," the SEC said in a companion civil complaint filed in New York federal court. It said the email included a link to "a picture of an expensive Stella McCartney designer handbag available for $700 at Neiman Marcus."

Mr. Sebbag allegedly replied that he would get her the bag "next week" and added, "I may be able to (buy) u 2 of them." To which she purportedly emailed back, "In that case, I also love love these shoes," and attached a link to a photo of Stella McCartney shoes at Neiman.

On May 22, a "Bj Hoxie," who appeared to be the same Bonnie Hoxie, posted a Facebook update that said, "I go shopping shopping shopping!!"

Wednesday's arrests resulted from a far more straightforward and streamlined investigation than other recent high-profile crackdowns on insider trading, which have involved months of meticulous sleuthing to piece together the illicit flow of information.

In this case, the alleged peddlers simply put their offer in writing and sent it out so widely that word of the scheme was bound to reach authorities.

The criminal complaint alleges that at one point Mr. Sebbag attempted to sweeten the pot by offering a supposed tidbit: that Disney was in advanced talks to sell its ABC television network to a pair of private-equity firms. Disney in a statement said any such claims "were and are false."

[hobie16]

Part 2.

In communications with FBI undercover agents, who were posing as interested stock traders, Mr. Sebbag "stated that he was looking to build a business relationship" and "was able and willing to provide them non-public information on a regular basis in the future," the SEC complaint said. He also "made clear" that he wanted to be paid for the information, "understood his conduct carried 'risks,' and that he wanted to avoid getting caught," the complaint added. In one email he allegedly said, "I was thinking $20000 is a fair compensation but you are free to make an offer."

At a May 14 meeting in New York with undercover agents, Mr. Sebbag "lifted the veil of his alias" and provided his identity, said the SEC complaint.

He also allegedly admitted that he didn't work for Disney but that his girlfriend was a secretary to a high-ranking Disney employee. He said he was sharing some of the money with her, according to the complaint.

At that May 14 meeting, the complaint said, Mr. Sebbag also asked the undercover agents "for their advice on how to open up an off-shore account in order to deposit the proceeds of the scheme so as to avoid notice by enforcement authorities." He stated, the complaint added, that "he didn't 'want to go to jail.'" He said he would go to Israel to open an account there, according to the complaint. He allegedly agreed that future discussions with his supposed confederates would be done via prepaid cell phones that "would be regularly switched to make detection of the scheme more difficult."

The complaint said he left the meeting with $15,000 cash in an envelope. Meanwhile, the U.S. Attorney's office said the "investigation is continuing."

[hobie16]

These two dopes remind me of an incident at a mainframe computer company I worked for. Let's call our company A

We had a systems engineer from San Jose, CA who was taking classes at our ed. center outside of DC. He somehow got bid information for a Veterans Administration contract made by company B worth about $50 million. He called company C and tried to sell them the info for $500,000. This was right around the time the ABSCAM sting took place. Company C freaked out and called the FBI.

A FBI agent took the next call and, while bidding him down to $150,000, traced the call. At 5 AM the next morning the SEs hotel door was kicked in by the FBI and both the SE and his roommate, who knew nothing, were busted.

The first thing anyone at California corporate of company A knew about the whole thing was a call from a NY manager who saw the whole thing on Good Morning America. Needless to say, the SE was fired post haste.

But the story doesn't end there. I managed corporate telecommunications. One of my staff, Donna, received a call from the local phone company in DC demanding we pay the bill run up by the fired SE and charged to his immediately canceled phone card (this was waaayy before cell phones). I overheard the conversation and asked Donna what was going on. Once I found out I told her to have the telco lady call back in half an hour.

I called the director of HR and told him the story. He said he could not give out confidential info but we might want to stop by his desk in five minutes. We watched him leave his cube, walk to the HR records cube, pull a file, and walk back to his cube waving the file in the air. He then went to the lobby.

Donna went to his desk and copied the fired SEs home number. She gave it the the telco lady when she called back.

The next day the HR director took a call from an enraged SE who was now on the hook for over $1,000 in long distance charges. The director obviously knew nothing.

I love it when a plan comes together. Muuuuaaahahahahahahahaha!!

[darph nader]

Kinda like a year or so ago,when someone got ahold of the formula for Coke and called Pepsi. Pepsi immediatly called Coke and told them. End of story.

[hobie16]

You'd think someone working in executive staff would know better. Just goes to show.

[GRUMPY PIRATE]

hehehehe

I wish I could tell some stories..

suffice to say that people that THINK they are smarter than the average bear..

are usually not. :D:

[BRWombat]

If there is a Stupid Employee Tricks site, this woman will have her face embedded into the logo.

...

Wow, just... wow. So basically, they sent lots of letters out saying in effect, "Hi! You don't know us, but we're committing a crime and want you to help. If you don't, that's cool, but please don't tell anybody, 'kay?"

What morons!