Man pleads guilty in Disney insider trading scheme
NEW YORK — A man charged with selling secrets about finances at Walt Disney Co. pleaded guilty in federal court yesterday to wire fraud charges and conspiracy to commit securities fraud.
Yonni Sebbag, a citizen of Morocco, and his girlfriend, former Disney employee Bonnie Hoxie, were arrested in California in May in the insider trading case filed in New York.
“I agreed with others to commit securities and wire fraud,’’ Sebbag, 30, said in court. “As part of this, I disclosed material and nonpublic information about the Walt Disney company to outside investors.’’
The government said the pair arranged for anonymous letters to be sent in early March to dozens of hedge funds and other investment companies offering to sell secrets. Most of the hedge funds and companies that received the offers notified the FBI.
Federal agents then posed as hedge fund traders and offered to buy the information from Sebbag and Hoxie, prosecutors said.
Before Disney’s May 11 earnings report, the couple sent FBI agents a copy of a 107-page document titled: “The Walt Disney Company Q2 Fiscal 2010 Key Topics Speaking Points,’’ prosecutors said. The pair notified agents two hours before the public earnings announcement that Disney’s results would exceed stock analysts’ expectations.
Sebbag said yesterday that he was paid $15,000 for the information when he met two undercover FBI agents in New York, and was ordered to return the money. Prosecutors said he agreed to provide similar confidential information in the future in return for a 30 percent share of any profits from early trades.
Sebbag has been held without bail in Manhattan because he was deemed a flight risk. Sentencing was set for Nov. 16. A plea agreement recommends that the judge impose a prison sentence of two years and three months to two years and nine months.
Prosecutors said Hoxie, who had been employed at Disney since Dec. 18, 2007, obtained information, like Disney’s quarterly earnings, before the results were publicly released and fed the information to Sebbag. Hoxie’s case is still pending.