Sebbag, Who Leaked Disney Earnings, Pleads Guilty to Conspiracy
A California man accused of leaking Walt Disney Co.’s earnings information pleaded guilty to conspiracy and wire fraud in Manhattan federal court.
Yonni Sebbag, 30, and his girlfriend, Bonnie Hoxie, the former assistant to Disney corporate communications chief Zenia Mucha, were arrested in California on May 26 for leaking confidential stock tips about the entertainment company’s earnings. Sebbag has been jailed since his arrest.
“From March 2010 to May 26, 2010, I agreed with others to commit securities fraud and wire fraud,” Sebbag told U.S. Magistrate Judge James Cott in Manhattan yesterday. “I disclosed material, non-public information about the Walt Disney Co. to outside investors,” he said, adding later, “I transmitted via electronic mail that material, non-public information.”
Sebbag, who is a Moroccan citizen, faces deportation and a prison term of as long as 33 months in prison when he is sentenced by U.S. District Judge Barbara Jones, Cott said.
Prosecutors say Sebbag sent letters in March to at least 33 investment companies, including hedge funds, offering to sell confidential information about Burbank, California-based Disney.
On March 11, an undercover agent with the Federal Bureau of Investigation began reaching out to the pair, according to a criminal information filed in New York. On May 8, the two gave undercover FBI agents internal Disney documents, according to the filing.
None of the funds acted on the tips, a person familiar with the matter said. Disney said it cooperated with prosecutors.
The charge of wire fraud carries a statutory term of as long as 20 years in prison, Cott said yesterday. As part of his guilty plea, Sebbag also agreed to forfeit the $15,000 he received from the undercover FBI agent as part of a scheme. The government said the evidence against Sebbag included audiotape and videotaped evidence of Sebbag soliciting the FBI agent who was posing as a hedge fund manager.
His lawyer, Steven Kartagener, said his client isn’t cooperating with prosecutors.
“Mr. Sebbag has come forward and accepted full responsibility for his misconduct,” Kartagener said in an interview after court. “The foundation of this guilty plea was a fair basis to go forward and ultimately resolve this matter.”
Cott set a Nov. 16 court date in the case. No sentencing date has been set by Judge Jones, Cott said.
Criminal charges are pending are pending against Hoxie, who remains free on bail. Her lawyer, Robert Baum, couldn’t be immediately reached for comment.