New York investment banker Frank Hixon is now facing criminal insider trading and false statement charges in addition to the initial civil actions brought against him by the Securities and Exchange Commission for insider trading.
Hixon, who served as senior managing director at Evercore Group from 2010 to January of this year, is accused of using inside information to trade on shares of two firm clients and those held by his firm. According to a statement from the SEC, which filed suit against Hixon on Feb. 20, the trades netted almost $1 million in illegal profits.
Thomas Gorman, a partner at Dorsey & Whitney who focuses on defending SEC, U.S. Commodity Futures Trading Commission and other regulatory investigations and actions, explains in a blog post that Hixon traded, through the account of Nicole “Destiny” Robinson, the mother of his 5-year-old daughter, ahead of several major announcements made by his client, Westaway Group Inc., in 2011 and 2012. He then went on to trade, through Robinson’s account and an account in the name of his father, Frank Hixon Sr., ahead of a merger announcement made by another client, Titanium Metals Corporation.
In January of 2012, Hixon even bought shares in his own firm Evercore through Robinson’s and his father’s accounts, which were then liquidated at a profit of $77,000 combined.
The SEC statement points to text messages between Hixon and Robinson that suggest he engaged in illegal insider trading to generate profits as a form of child support payments. When Evercore received inquiries from the Financial Industry Regulation Authority about potential suspicious trades made for Hixon Sr. and Robinson, Hixon allegedly denied knowing either of them.
“It is bad enough to be caught up and charged with insider trading in a civil SEC enforcement action. It is worse to have those claims and criminal insider trading and false statement charges added,” Gorman writes.
Gorman reports that both cases are pending.