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Investment Banker Guilty of Inside Trading

February 22, 2014

A former New York City investment banker was accused of insider trading Friday for allegedly using brokerage accounts of the mother of his child and his father to reap hundreds of thousand of dollars in illegal profits, federal authorities said.

Frank “Perk” Hixon Jr., a former senior managing director in the mining and metals division of investment bank Evercore Group, allegedly used non-public information he obtained through his job to make trades in the stocks of three firms before market-moving news was announced.

Manhattan federal prosecutors charge Hixon, 55, with five criminal counts of securities fraud, two counts of securities fraud in connection with a tender offer and one count of making a false statement to investigators.

Unlock Your Wealth Radio reports investment banker charged with insider trading

Unlock Your Wealth Radio reports investment banker charged with insider trading

The Securities and Exchange Commission announced separately that a federal judge had issued an emergency freeze on one of the accounts used in the alleged insider trading. Hixon generated at least $950,000 in illegal insider trading profits, the SEC said, though the criminal complaint identified a lower amount.

Evercore characterized Hixon as a rogue employee and said he was fired last month. The bank said it had reported suspicions about his trades to authorities.

“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.

Manhattan U.S. Attorney Preet Bharara said the alleged crimes were compounded, “when the former investment banker tried to evade detection by lying to investigators and to his company” that he didn’t know his father or mother of his child.

Hixon’s alleged illegal trading took place in 2011-2013 and involved three firms: Titanium Metals, acquired in 2013 by Precision Castparts; Westway Group, which merged with EQT Infrastructure II last year, and Evercore, his own employer.

Federal authorities alleged Hixon executed some of the trades by logging into the brokerage account of Destiny “Nicole” Robinson, the mother of his young child. She lived in Austin, Tex., according to the criminal complaint. Other trades allegedly went through the account of his father, Frank Hixon, Sr., who lived in Johns Creek, Georgia.

Hixon denied recognizing the name of Robinson and his father when Evercore asked him about suspicious trading in the two accounts, the SEC said. When later confronted with evidence he actually knew both, Hixon allegedly claimed he didn’t known Robinson as “Destiny” and didn’t recognize the name of the city where his father had lived for 25 years.

According to the criminal complaint, Hixon in January told FBI agents he had never traded in Robinson’s account and didn’t know that his father had traded in stocks of the companies involved in the investigation.

If convicted, Hixon could face maximum 20-year sentences on each of the security fraud counts and up to five years on the false statement charge.

The charges against Hixon represent the latest development in a multi-year crackdown on insider-trading violations by Bharara’s office.

At a federal Magistrate Court hearing Friday, Hixon was orderd to post a $5 million personal recognizance bond secured by $2 million in cash, surrender his U.S. passport and restrict any travel to New York’s southern and eastern federal districts.

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