Deal Maker Pleads Guilty to Insider Trades

Posted by Chris Morales on Fri, Apr 18, 2014 @ 09:40 AM

The Morales Law Firm would like to share this article by the Wall Street Journal. For more information visit: http://online.wsj.com/news/articles/SB20001424052702303847804579478002889416192

By: Christopher M. Matthews

Frank Perkins Hixon Jr. pleaded guilty to insider-trading charges Wednesday, capping the downfall of the former senior deal maker at Wall Street fixture Evercore Group LLC. 

Mr. Hixon, who often goes by "Perk," admitted he used confidential information from his job working on mergers and acquisitions at the investment bank in trades that netted him more than $700,000.

Prosecutors and lawyers from the Securities and Exchange Commission had alleged in criminal and civil complaints that the former Evercore senior managing director made $1.2 million using the inside information to trade in accounts held by his father and ex-girlfriend, who allegedly took profits in lieu of child support.

Mr. Hixon was well-known on Wall Street. His arrest in February roiled the tightknit world of Wall Street deal makers, where confidentiality is considered sacrosanct. Evercore was founded by former Deputy Treasury Secretary Roger Altman and specializes in advising corporate clients on mergers, restructurings and financing.

Mr. Hixon, 55 years old, was arrested in Manhattan in February by Federal Bureau of Investigation agents and charged with seven counts of securities fraud and one count of making false statements to federal agents.

On Wednesday in federal court in Manhattan, he pleaded guilty to three counts of securities fraud, two counts of securities fraud in connection with a tender offer and one count of making false statements.

Mr. Hixon, who wore a gray suit, said that after he got inside information, he personally made trades in one of the brokerage accounts and called the other individual, whom he didn't name but whom SEC lawyers said was his father, and directed that person to make trades.

A lawyer for the father, Frank P. Hixon Sr., 80, didn't respond to a request for comment.

When the FBI confronted the younger Mr. Hixon, he said he lied. "I knew the statements were false and I'm sorry these actions affected my family and friends," he said.

Under the terms of his plea agreement, prosecutors will recommend a sentence of between 46 and 57 months in prison and he will forfeit $710,000. U.S. District Judge Ronnie Abrams, who presided over Wednesday's hearing, will determine the sentence.

A lawyer for Mr. Hixon declined to comment.

A spokesman for Evercore said Wednesday: "We, of course, are outraged by his actions, and we appreciate that the regulatory authorities and the justice system have dealt swiftly and effectively with this matter." Evercore "worked closely throughout with the authorities," the spokesman said, adding that the firm "never had a situation like this before in our 20-year history."

Mr. Hixon went to the University of Virginia and Harvard Business School and joined Evercore in 2010 to lead a newly formed mining and metals group.

In a civil complaint filed in February in Texas, SEC lawyers identified the "close relative" as Mr. Hixon's father, and his ex-girlfriend as Destiny "Nicole" Robinson, 36, who also is the mother of his daughter.

Efforts to reach Ms. Robinson were unsuccessful.

Ms. Robinson and the younger Mr. Hixon were in a relationship from 2005 to 2008, according to the SEC complaint, at which point she moved to Austin, Texas, from New York while pregnant with his child. Once there, she opened the brokerage account in which she received trading profits from Mr. Hixon, the SEC said.

Prosecutors said that in one instance, after learning confidential information about an impending acquisition of Titanium Metals Corp. by Precision Castparts in October 2012, Mr. Hixon allegedly used the information to make trades that netted a profit of more than $250,000.

But by 2013, Evercore had received alerts from the Financial Industry Regulatory Authority, an industry regulator, and the company confronted Mr. Hixon about trading in accounts belonging to Ms. Robinson and his father, according to the SEC.

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Tags: guilty, investment, pleads, insider trading, charges