Skip navigation

When You Wish Upon A Star You Go To Jail: The Disney Insider Trading Cases

or Register to post new content in the forum



  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
May 26, 2010 5:41 pm



SEE Bill Singer's BloombergTV Interview

BONNIE J. HOXIE, 33, an assistant to a top executive at Walt Disney Company ("Disney"), and YONNI SEBBAG, a/k/a "Jonathan Cyrus," 29, a friend of HOXIE, were arrested on May 26, 2010, and charged with two counts of conspiracy and wire fraud. The charges against both HOXIE and SEBBAG stem from their participation in an insider trading scheme in which HOXIE, in her capacity as a Disney employee, obtained confidential inside information, including about Disney's quarterly earnings, and passed that information to SEBBAG, who in turn attempted to sell the information to buyers seeking to trade on inside information.

From March 2010 through May 25, 2010, HOXIE was employed as a secretary to Disney's Head of Corporate Communications. In this capacity, HOXIE obtained material, nonpublic information, including Disney's quarterly earnings statements (the "Inside Information"). Then, in violation of her duties of trust and confidence, HOXIE disclosed the Inside Information to SEBBAG, who in turn disclosed the Inside Information to outside investors for the purpose of trading in advance of the official public announcement of Disney's earnings.

As part of the scheme, SEBBAG and HOXIE caused to be sent anonymous letters to multiple hedge funds and other investment companies, many of which were located in Manhattan, offering to sell the Inside Information for purposes of illegal insider trading. Various agents of the FBI, who were working in undercover capacities, posed as hedge fund traders (the"Tippees") and offered to buy the Inside Information from SEBBAG and HOXIE for purposes of trading in advance of the public announcement of the Inside Information.

On May 8, 2010, three days in advance of the May 11, 2010, public announcement of Disney's earnings for the second quarter of 2010, SEBBAG and HOXIE caused to be sent to the Tippees a confidential document titled "The Walt Disney Company Q2 Fiscal 2010 Key Topics Speaking Points," which contained a collection of talking points that Disney executives referred to while answering analysts' questions during the May 11, 2010, earnings call. On May 11, 2010, roughly two hours in advance of the public announcement, the defendants notified the Tippees that Disney's earnings per share would be 48 cents -- which was better than what stock analysts had predicted.

On May 14, 2010, SEBBAG met with two undercover FBI agents in New York and accepted payment of $15,000 cash for having released the Inside Information. SEBBAG further agreed that he would provide similar confidential information in the future in return for a thirty percent share of any profits from the insider-trading scheme.

HOXIE and SEBBAG each face a maximum sentence of 20 years in prison on the wire fraud charge and five years in prison on the conspiracy charge. On both counts, HOXIE and SEBBAG also face a fine of the greater of $250,000, or twice the gross gain or gross loss from the offense. Both individuals are presumed innocent until and unless proven guilty in a court of law.

See Copy of US Attorney Criminal Complaint:

USA's Press Release:

Washington, D.C., May 26, 2010 — The Securities and Exchange Commission today charged a Walt Disney Company employee and her boyfriend in a scheme to sell confidential information about Disney's quarterly earnings to hedge funds.

The SEC alleges Bonnie Jean Hoxie — an administrative assistant to a high-level Disney executive — and her boyfriend Yonni Sebbag sent anonymous letters in March 2010 to more than 20 hedge funds in the U.S. and Europe, offering to provide pre-release results of Disney's second quarter 2010 earnings in exchange for a fee. Some hedge funds alerted the SEC, which immediately worked with the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation (FBI) to investigate. The FBI set up an undercover operation and made several contacts with Sebbag who offered to sell the information, in one instance for $15,000 and in another for half the expected trading profits.

The SEC alleges that Sebbag told FBI agents posing as investment managers that he wanted to establish a business relationship to share confidential information on a regular basis, and wanted to be compensated. Sebbag also expressed his understanding of the risks involved and his desire to avoid being caught. Among excerpts of Sebbag's e-mails to undercover agents (includes original spelling and punctuation):

"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 discrete 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."

See Copy of SEC Complaint:

Bill Singer's Comment:  I'm sorry but it's truly hard not to view this case as one of comic relief -- the criminal enterprise was undertaken with such ineptitude that I fully expect that Disney/ABC will soon develop this into a family comedy, if not a sitcom.  After you have read the Complaints, I'm sure that you too will find it difficult not to laugh.

Except for the fact that this is all too tiring and enervating. Enough already!  I mean, geez, is nothing sacred anymore?  Disney? The home of Mickey Mouse. Davy Crockett. And all those years of my Baby Boomer childhood.

Alas, I'm guessing that our defendants will likely claim that they were grossly misunderstood.  That they weren't attempting to do anything illegal.  No -- this was just a dream of theirs.  Their hearts' desire.  They were simply hoping that fate would deliver. How does that old Disney song go? Oh yeah, I remember:

When you wish upon a star
Makes no difference who you are
Anything your heart desires
Will come to you

If your heart is in your dream
No request is too extreme
When you wish upon a star
As dreamers do

Fate is kind
She brings to those who love
The sweet fulfillment of
Their secret longing

Like a bolt out of the blue
Fate steps in and sees you through
When you wish upon a star
Your dreams come true
  SEE Bill Singer's BloombergTV Interview
May 27, 2010 7:33 pm

All I can say is dumb and dumber!!!