January 20, 2019

Actually, Providing For Your Child Isn’t That Cool When You Insider Trade to Do It

For the last time, people, insider trading is not cool. Not ever.

It is especially not cool when you use an account belonging to someone who is related to you, either by blood or by the miracle of childbirth. Ask our friend Steven M. Dombrowski in Chicago how that worked out for him, although at least he had the decency to keep his ill-gotten gains somewhat low.

Anyway, let's take a look at the release from the SEC:

The Securities and Exchange Commission today announced an emergency action against a New York City-based investment banker charged with insider trading for nearly $1 million in illicit profits.

The SEC alleges that while working on Wall Street, Frank “Perk” Hixon Jr. regularly logged into the brokerage account of Destiny “Nicole” Robinson, the mother of his young child.  He executed trades based on confidential information he obtained on the job, sometimes within minutes of learning it.  Illegal trades also were made in his father’s brokerage account.  When his firm confronted him about the trading conducted in these accounts, Hixon Jr. pretended not to recognize the names of his father or his child’s mother.  However, text messages between Hixon Jr. and Robinson suggest he was generating the illegal proceeds in lieu of formal child support payments.

Huh? Destiny? I don't know no Destiny. Please, bro, we all know a Destiny ifyoufeelme.

“Hixon Jr. violated the trust of his employer and clients by abusing his special access to nonpublic market-moving information,” said David Woodcock, director of the SEC’s Fort Worth Regional Office.  “Hixon Jr. went to great lengths to hide his wrongdoing and even denied knowing his father or the mother of his child.”

A federal judge has granted the SEC’s request and issued an emergency order freezing Robinson’s brokerage account, which the SEC alleges contains the majority of proceeds from Hixon Jr.’s illegal trading with a balance of approximately $1.2 million. 

$1.2 million for child support? Man, the spawn of Perk and Destiny must be one hell of a kid.

According to the SEC’s complaint unsealed today in federal court in Austin, Texas, Hixon Jr. illegally tipped or traded in the securities of three public companies.  He traded ahead of several major announcements by his client Westway Group in 2011 and 2012.  He traded based on nonpublic information he learned about potential client Titanium Metals Corporation ahead of its merger announcement in November 2012.  And Hixon even illegally traded in the securities of his own firm Evercore Partners prior to its announcement of record earnings in January 2013.  Hixon Jr. generated illegal insider trading profits of at least $950,000. 

According to the SEC’s complaint, when Hixon Jr.’s employer asked him in 2013 whether he knew anything about suspicious trading in accounts belonging to Destiny Robinson and his father Frank P. Hixon Sr., who lives in suburban Atlanta, Hixon Jr. denied recognizing either name.  When later confronted with information that he did in fact know these individuals, Hixon Jr. continued his false claims, saying he didn’t know Robinson as “Destiny” and asserting in a sworn declaration that when approached he didn’t recognize the name of the city where his father lived for more than 25 years.  Hixon Jr. was subsequently terminated by his employer.

When in doubt, stick with the I have no idea what you are talking about defense. Even if you're a junior trying to deny you even know the guy you're named after.

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