Frank Perkins Hixon, Jr., a former senior managing director of Evercore Group LLC, has been charged with insider trading. U.S. Attorney for the Southern District of New York Preet Bharara and Assistant Director in Charge of the New York Office of the FBI George Venizelos announced the arrest on Saturday.
Hixon, 55, was arrested on Saturday morning at his apartment in Manhattan. According to prosecutors, Hixon used inside information to trade and cause others to trade in the securities of Evercore, Westway Group Inc., and Titanium Metals Corporation. He is also being charged with making false statements to the FBI.
“As we have often said, those like Frank Perkins Hixon, Jr. who illegally manipulate the market by allegedly trading on material non-public information exploit law-abiding investors and traders. In this case, the alleged wrongdoing was compounded when Hixon tried to evade detection by lying to investigators and to his company,” Bharara stated in a press release.
Hixon was a senior managing director with Evercore Group between April 2010 and January 2014. In 2011, he allegedly advised Westway about a non-public offer from another company to purchase its business components. The company’s offer was made in September 2011, and was not announced publicly until December 2011.
During that time, Hixon purchased 229,000 shares of Westway through the bank account of his child’s mother. He then sold about 140,000 of the shares for a profit of approximately $260,000.
In October 2012, Hixon learned of the possible acquisition of Titanium by Precision Castparts Corp. (PCP). Within one hour, Hixon purchased 20,000 shares of Titanium using the same bank account. Eight days later, Hixon purchased another 20,000 shares through the same account, and another 15,000 shares through the bank account of his close relative.
Titanium announced the tender offer for its shares in November 2012. On the first trading day following the announcement, Hixon sold all of the shares he had purchased in October for a total profit of approximately $222,000.
In January 2014, Hixon was confronted by the FBI about the purchases. He claimed that he had never used said brokerage accounts to trade. He also claimed that he had never even accessed the accounts.
Hixon is being charged with five counts of securities fraud, two counts of securities fraud in connection with a tender offer, and one count of making a false statement. The first seven charges carry a maximum penalty of 20 years in prison, while the charge of making a false statement has a maximum penalty of five years in prison.
[Source: U.S. Attorney Preet Bharara]
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