Suspect Pleads Guilty in Disney Insider Scheme8/24/2010 11:45 AM Eastern
The mastermind of a scheme to sell inside information from the Walt Disney Co. to Wall Street managers pleaded guilty in U.S. District Court in New York Monday.
Yonni Sebbag, who along with his girlfriend Bonnie Jean Hoxie, attempted to sell information in Disney's second quarter earnings report before its official release to the public, were arrested in May and were charged with conspiracy and wire fraud regarding the scheme. The two faced up to 25 years in prison if convicted.
According to a report in the Associated Press, Sebbag pleaded guilty to wire fraud charges and conspiracy to commit securities fraud. Although the two charges carry maximum penalties of up to 25 years, the plea agreement recommends a sentence of between two years and three months and two years and nine months, according to the AP. Sentencing is scheduled for Nov. 16, according to the wire service.
Sebbag and Hoxie had sent letters to more than 20 hedge fund managers and investment bankers in March offering to leak information on Disney financials prior to their release to the public in return for 30% of any trading profits. The hedge funds and bankers immediately contacted the FBI, which set up a sting operation to ensnare Sebbag.
After a lengthy exchange of e-mails, Sebbag, who was using the alias Jonathan Cyrus, agreed to accept $15,000 for the insider information from one undercover agent and a 50-50 split of trading profits from another.
Sebbag agreed to return the $15,000 as part of his plea agreement. A citizen of Morocco, he also faces possible deportation.
Hoxie, who had served as an administrative assistant to Disney head of communications Zenia Mucha, had sent e-mails to Sebbag requesting gifts such as a $700 handbag in return for information.
Hoxie's case is still pending, according to the AP. She remains free on $50,000 bail.