"Hi-Diddle-Dee-Dee" - Boyfriend Who Tried to Sell Stolen Disney Earnings Data Probably Wishing Upon a Star Now
By Todd
DNAinfo is reporting that the boyfriend of a former Disney executive secretary has pleaded guilty of attempting to sell inside information regarding Disney and, alas, actually sold it to federal agents. Charges against the girlfriend, Barbara Hoxie, are still pending. The boyfriend's name is Yonni Sebbag. He is apparently 30 years old and Ms. Hoxie is 33 years old.
As reported previously by SiftMedia here http://www.accountingweb.com/topic/watchdog/disney-employee-finds-out-hard-way-insider-trading-doesn-t-pay, the details of the attempted scam involved letters and e-mail communications to Wall Street hedge funds.
The letters were postmarked from Los Angeles, and stated:
Hi, I have access to Disney’s (DIS) quarterly earnings report before its release on 5/03/10 [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 eilatcap@gmail.com.I count on your discretion as you can count on mine. Thank you and I look forward to talking to you.
The letters offered to reveal before they were officially released results from Disney’s earnings from the second quarter of this year in exchange for a fee. The SEC complaint states that one offer letter mentioned a fee of $15,000, and another asked for half of the expected trading profits. Some of the hedge funds that received letters contacted the SEC. The SEC, in turn, reached out to the U.S. Attorney and the FBI to initiate an investigation.
As part of the probe, the FBI sent an undercover agent, posing as an investment manager, to meet with Sebbag, who used the alias Jonathan Cyrus. According to the agent, Sebbag said he had confidential information to share on a regular basis in exchange for compensation. He wanted a “business relationship,” and said that he understood this relationship would involve risks.
Sebbag sent e-mail messages to the agents, some of which the SEC reprinted (complete with original spelling and punctuation errors):
Hi, I have access to Disney’s (DIS) quarterly earnings report before its release on 5/03/10 [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 eilatcap@gmail.com.I count on your discretion as you can count on mine. Thank you and I look forward to talking to you.
The letters offered to reveal before they were officially released results from Disney’s earnings from the second quarter of this year in exchange for a fee. The SEC complaint states that one offer letter mentioned a fee of $15,000, and another asked for half of the expected trading profits. Some of the hedge funds that received letters contacted the SEC. The SEC, in turn, reached out to the U.S. Attorney and the FBI to initiate an investigation.
As part of the probe, the FBI sent an undercover agent, posing as an investment manager, to meet with Sebbag, who used the alias Jonathan Cyrus. According to the agent, Sebbag said he had confidential information to share on a regular basis in exchange for compensation. He wanted a “business relationship,” and said that he understood this relationship would involve risks.
Sebbag sent e-mail messages to the agents, some of which the SEC reprinted (complete with original spelling and punctuation errors):
"First of all, i am not a fed, I have no way to prove it at this point but i am not asking you to disclose your identity not i will disclose mine. It is up to you to determine if this is worth the risk as i did. I work for Disney, that is all i can tell you."
"I can deliver 3 to 4 days before release. I will email you the report as soon as i have it and you will wire transfer the money to my account after you get ahold of it. I am asking you to make me an offer based on the capital gains from the trade and the risk i am taking delivering this information to you? Also, i am looking to build a strong business relationship with you for future quarters and information."
"I dont think we will get caught if we stay discret and careful. You can count on my discretion as i am counting on yours…"
"… $15k sounds great and $30k even better as i hope you will make a killing from Q2 earnings. I promise i will keep you informed of any unanticipated event, i keep my ears wide open here."
Sebbag allegedly provided the agents with a 107-page confidential document two days before the company’s earnings were announced. The documents contained talking points for the Disney executives for an upcoming conference call and detailed information about quarterly performance and future prospects. Hoxie also gave Sebbag Disney’s earnings per share, which he gave to the agents two hours before the figures were to be released.
After the exchange, Sebbag made plans to meet with the agents again in person to collect his fee. On May 14th, the complaint states, he met with agents in New York telling them he wanted to make a lot of money and asked their advice on opening an offshore account in which to stash the cash. He left the meeting with $15,000 and an arrangement to meet again in California.
Sebbag allegedly provided the agents with a 107-page confidential document two days before the company’s earnings were announced. The documents contained talking points for the Disney executives for an upcoming conference call and detailed information about quarterly performance and future prospects. Hoxie also gave Sebbag Disney’s earnings per share, which he gave to the agents two hours before the figures were to be released.
After the exchange, Sebbag made plans to meet with the agents again in person to collect his fee. On May 14th, the complaint states, he met with agents in New York telling them he wanted to make a lot of money and asked their advice on opening an offshore account in which to stash the cash. He left the meeting with $15,000 and an arrangement to meet again in California.
On May 26th, the couple was arrested.
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