A 33-year-old Disney secretary and her 29-year-old boyfriend were arrested and charged for this pitiful little attempt at insider trading:
Insider-trading networks are typically close-knit groups that go to great lengths to shield their activities. Hoxie and Sebbag, by contrast, allegedly sent anonymous letters offering early peeks at earnings reports to nearly three dozen hedge funds, which promptly tipped off the authorities.
“This is the insider trading equivalent of the bank robber who drops off the demand note and comes back in an hour to pick up the money,” said Robert A. Mintz, a former federal prosecutor who is a partner at McCarter & English in Newark, N.J. “It’s mind-boggling that somebody would even try to get away with something like this.”
The FBI set up a meeting May 14 in which agents posing as hedge fund traders gave Sebbag $15,000 as payment for a 107-page confidential document on Disney’s quarterly earnings.
The arrest shocked Hoxie’s father, who said her Disney job was the best one she’d had in a decade of living in Los Angeles.
“It can’t be for financial reasons that I could understand. It’s got to be, for lack of a better word, for love or a relationship with this guy,” said Patrick Hoxie, contacted in Jackson, Mich. “She lives in a dinky apartment, drives an old car. She has a real basic lifestyle.”
Here’s a link to her glamorshot photo, compare with a normal photo nabbed from Facebook. On her Facebook, she says she “will marry rich — extremely rich,” and “i love, love, love to shop.”
I always think it’s a red flag as to bad character when a person has a flattering, professionally taken photo of themselves. (I don’t mean art photos, I mean where you go into a studio to get a head shot.) The only exception is if you have to do it for business. But she’s a secretary, and there’s no indication this was required for Disney.
One time this guy I was seeing gave me only a card for Christmas — with a wallet-size, soft-focus glamorshot of him inside, wearing a red blazer and white T-shirt. We were in our mid-20s at the time. It was pretty clear that the picture hadn’t been taken for me, since I only got a wallet-size. He was a sports reporter, so it definitely wasn’t taken for business. No one cares what reporters look like and if they do, they’ll usually be disappointed.
I had given him a book and a bottle of Scotch. When we stopped seeing each other, he mailed me the book back. But not the Scotch. Asshole. He’s still single.
That was mind boggingly stupid, but then most criminals are pretty stupid. Michael Crichton noted that in his autobiographical book Travels. He mentioned shadowing an LAPD detective for some book or screenplay he was writing and how he was sort of let down by how stupid the criminals were and how easy it was for the detectives to catch them.
As for professionally done photos, a lot of folks who aren’t in show business seem to have those these days. I don’t see anything wrong with it.
And as for your guy friend sending you back the book but not the scotch, he had probably drank it already.
Comment by DaveinHackensack — May 28, 2010 @ 3:28 pm
“I don’t see anything wrong with it. ”
Not wrong, per se, but perhaps a sign of excessive vanity or superficiality — that could lead for example to excessive shopping, and willingness to steal money to support the excessive shopping, etc.
“And as for your guy friend sending you back the book but not the scotch, he had probably drank it already.”
Well, then he should have at least kept the book and read it. They were gifts, I didn’t want either of them back — but if he was going to give me the finger by giving the book back (it was a Gloria Steinem book), he should give back the Scotch as well.
Comment by stone — May 28, 2010 @ 3:41 pm
The difference between the “glamor” and the regular photos is amazing, she scarcely looks like the same person.
Comment by Peter — May 28, 2010 @ 7:54 pm
Yes — in one she looks like Sally Fields, in the other she looks, well, Hispanic. And 20 pounds heavier.
It’s amazing what lighting can do. Also what b&w can hide.
It’s for sure not a Disney corporate photo — I went to their website to check, and found the section on her boss. There’s no photo of her and that’s not the style they use.
Comment by Sheila Tone — May 29, 2010 @ 5:57 am
Are criminals super dumb, or does crime just a have a steep learning curve? If I get a new job, screw something up that’s not super-major, I’ll get a lecture, or training, or just learn from my mistake. But if I start doing wire fraud and make a serious mistake, I’d get caught and won’t get to put my hard-earned wisdom to use from prison. Capable criminals probably have to come from criminal traditions where technique has been practiced of generations. Like mafioso or (some would say) Gypsies.
Comment by rob — May 29, 2010 @ 3:42 pm
Rob,
Some stuff is just common sense. You have to think about the risk versus reward from the perspective of the hedge fund managers. These are folks who are already well-off, so they’re not desperate. They’re not crackheads willing to take a stupid risk for a score. They work in a field where regulatory and enforcement agencies have recently been embarrassed by a huge fraud, and it wouldn’t be surprising for those regulators to act more zealously now. On top of that, the way they were contacted about this was so ham-fisted that it signaled the incompetence of the aspiring leaker. Heck, it was so amateur that the hedgies might have wondered if it were a federal sting operation.
In short, the potential upside of getting a heads up about the Disney quarter was dwarfed by the potential downside of going to jail and being banned from the hedge fund industry forever. A smart criminal wouldn’t have even attempted this.
The smarter criminal approach here would be to act on this info via proxies if it were actionable. E.g., let’s say you’re privy to info that Disney’s quarter is going to be materially better than analysts expect. You give your brother’s friend cash to buy calls on Disney and have him buy them on a couple of other stocks to be less obvious about it (you could have him just buy Disney stock, but since it’s a big cap stock, it’s probably not going to move that much on an earnings surprise. With call options, depending on other variables, you could make 100% or more on a 10% move in the underlying stock).
The secretary and her boyfriend could probably have done that quarter after quarter for a while and gotten away with it.
Comment by DaveinHackensack — May 30, 2010 @ 4:55 am
I wouldn’t expect an ex to return a consumable item like a bottle of Scotch.
Comment by Maria — May 30, 2010 @ 8:22 am
Dave, the put&call plan for insider trading is a good idea. You’re right, criminals do tend to be dumb.
Comment by rob — May 30, 2010 @ 5:05 pm
“7.I wouldn’t expect an ex to return a consumable item like a bottle of Scotch.”
The thing I’m pissed about isn’t really the non-return of the Scotch (gifts aren’t supposed to be returned), it was the fuck-you return of the book. After giving me nothing for Christmas himself except his stupid glamorshot.
If he was going to be all proud and return the book, he should replace the Scotch, too.
What he really should have done was read the book, he might have learned something.
Comment by Sheila Tone — May 30, 2010 @ 7:41 pm
If he felt that he needed to give back what he had gotten from her and he had consumed the scotch, he could have bought another bottle. Sort of like what one might do if they lost or broke something loaned to them.
Comment by trumwill — May 30, 2010 @ 8:57 pm
Of the handful of people I know who have glamour shots, none of them hand them out as gifts. They’re usually posted on a profile somewhere.
Aside from the aspiring actors, I’ve known people to get such pictures done on a whim because they saw how awesome it looks for the people who need them professionaly.
Comment by Nanani — May 31, 2010 @ 12:18 am
I think Glamour Shots were too good, in a way. Enough people started to know how different they could make a person look (and aerie style so familiar) that they lose their value.
Comment by trumwill — May 31, 2010 @ 1:12 am
“I think Glamour Shots were too good, in a way. Enough people started to know how different they could make a person look (and aerie style so familiar) that they lose their value.”
This reminds me of something. Years ago, on an online dating site, I came across a girl’s profile that had a rather plain-looking photo. In the profile, she noted that this was her drivers license photo, and presented her decision to use that as a sign of her lack of vanity or pretense. I wrote her back, saying that I respected her decision, and felt it was only fair to send a similarly candid photo of myself. To that note, I attached a photo of a friend’s brother lying on a bathroom floor hugging a toilet after a bachelor party.
Comment by DaveinHackensack — May 31, 2010 @ 2:40 am
It’s hard for me to explain why I think it’s worse to do the flattering studio photos individually than, say, in a family or wedding photo.
Off on a tangent, has anyone else seen those studio photos of new mothers naked with their babies? I mean, they don’t show anything R-rated, but you can tell the woman is naked. I guess it’s supposed to be more “intimate.” Seems to be a big thing this last decade or so, but it kinda creeps me out.
Comment by stone — May 31, 2010 @ 3:33 pm
“I wrote her back, saying that I respected her decision, and felt it was only fair to send a similarly candid photo of myself. To that note, I attached a photo of a friend’s brother lying on a bathroom floor hugging a toilet after a bachelor party.”
How’d the date go?
Comment by stone — May 31, 2010 @ 3:37 pm
Stone, what was the book?
Comment by rob — May 31, 2010 @ 4:18 pm
“How’d the date go?”
Date? I never heard back from her (not that I expected to).
Comment by DaveinHackensack — May 31, 2010 @ 6:18 pm
“Stone, what was the book?”
“Outrageous Acts and Everyday Rebellions,” by Gloria Steinem.
See, I understood that was a very self-interested gift on my part, so I threw in the Scotch to help it go down easier. He knew I already had my own copy of it. So giving it back to me was nothing but the middle finger.
Comment by stone — May 31, 2010 @ 11:58 pm
“Outrageous Acts and Everyday Rebellions,” by Gloria Steinem.
Rightly or wrongly, I see feminism as all about male-bashing, so I would have returned it, too.
Comment by Kirk — June 1, 2010 @ 8:59 am
Well, Kirk, you’re wrong. But if you were going to give it back on principle, the appropriate time to do it would be right when the gift is opened — not after we break up. If he’d tossed it back at me when I gave it to him, I could have kicked him to the curb then and there (and left with my Scotch).
Comment by stone — June 1, 2010 @ 10:33 am
He probably threw the Scotch out, Sheila. That’s what happened with one of my exes: he threw everything I gave him away, and then told me about it.
I don’t think I would have given a Gloria Steinem book to a man. My experience has been that even the nicest men don’t really like doctrinaire feminism that much.
Comment by Maria — June 2, 2010 @ 10:08 am
I’m with Kirk and Maria. I really can’t see any scenario in which giving a man a feminist book as a gift is a good move. Unless he’s given you good reason to believe that he’d like one, of course.
Maria:
He probably threw the Scotch out, Sheila. That’s what happened with one of my exes: he threw everything I gave him away, and then told me about it.
If he’d thrown the scotch out, he’d probably have thrown the book out, too, wouldn’t he?
Comment by Brandon Berg — June 3, 2010 @ 10:25 pm
Yeah, I agree. on the other hand, a guy who gives out a glamour shot photo of himself for a gift doesn’t exactly deserve a thoughtful present.
Good point .
Comment by Maria — June 4, 2010 @ 9:36 am