The US Attorney’s office in New York announced that an assistant to a top executive of The Walt Disney Company has been charged with offering to sell confidential company information to Wall Street investment managers. Bonnie Hoxie and her boyfriend, Yonnie Sebbag, who goes by the name Jonathan Cyrus, were nabbed when FBI agents posing as hedge fund traders arranged to buy inside information.
Hoxie had been the assistant to Zenia Muncha, Executive Vice President, Corporate Communications, at Disney. The federal charges of conspiracy and wire fraud allege that Hoxie and Sebbag sent anonymous letters to several Wall Street firms offering to sell them inside information. The FBI noted that most of the firms immediately alerted authorities.
On May 8, 2010, three days before Disney reported its quarterly earnings, Hoxie and Sebbag are alleged to have sent the undercover agents a confidential document entitled “The Walt Disney Company Q2 Fiscal 2010 Key Topics Speaking Points.” They are also alleged to have told the agents that Disney’s earnings per share would be 48 cents, which was better than analysts had expected.
According to the indictment, Sebbag met with the agents on May 14 in New York and accepted $15,000 payment. He also allegedly agreed to provide similar information for a 30% share of any trading profits.
Hoxie and Sebbag were arrested Wednesday (5/26) in Los Angeles. They are each charged with one count of wire fraud and one count of conspiracy. They could face a maximum sentence of 20 years on the fraud charge and five years on the conspiracy charge. They could also be fine of a quarter million dollars.
According to court documents, Sebbag told the agents at one point that Disney CEO Bob Iger was in advanced talks with a couple of private equity firms about a sale of the ABC Network. The company issued a brief statement Wednesday denying that is the case.
“The Walt Disney Company has been fully cooperating with this investigation. The reference in the complaint to conversations regarding the ABC Network were and are false,” the statement said.
The SEC, which had been involved with the FBI and US Attorney’s office in the case from the start, also filed a civil action Wednesday against Hoxie and Sebbag.