April 2 (Bloomberg) — Former Evercore Group LLC investment banker Frank Perkins Hixon Jr. pleaded guilty to insider trading in a scheme that the U.S. said he used to secretly pay child support to his ex-girlfriend.
Hixon, 55, of New York, who until January was a managing director at Evercore, today admitted using confidential information he obtained to trade, or causing others to trade, shares of three companies including Evercore, the investment bank founded by ex-U.S. Deputy Treasury Secretary Roger Altman, as well as Westway Group Inc. and Titanium Metals Corp.
Known as Perk, Hixon is among dozens of Wall Street professionals to be accused of insider trading. Manhattan U.S. Attorney Preet Bharara has won 79 insider cases against individuals, and lost none, in a federal crackdown that was announced in October 2009.
Hixon pleaded guilty to five counts of securities fraud and one count of making false statements to federal agents at a hearing before U.S. District Judge Ronnie Abrams in New York. He was charged in February in a scheme that ran from October 2011 to January 2013.
According to the U.S., Hixon, who is married, profited from the nonpublic information he learned from his job as an investment banker. The U.S. Securities and Exchange Commission alleged in a parallel suit that Hixon used the illegal tips to buy stock for accounts of his father and his ex- girlfriend, Destiny Robinson, 36, in lieu of formal support payments for the child he fathered with her in 2008.
The SEC said in its suit against Hixon and Robinson that she opened a brokerage account when she moved to Austin, Texas, from New York that year. The SEC alleged in its complaint that Hixon’s trades were executed in lieu of the support payments and that text messages between the two suggest that illegal trading was intended to financially support their child.
“I know that the statements I made were false and I’m sorry these actions affected my family and friends,” Hixon told the judge today. Hixon said he arranged for a series of trades to be made in the brokerage account of two unidentified individuals after he obtained material, nonpublic information and also made trades himself in those accounts.
The judge said under a plea agreement Hixon faces 46 months to 57 months in prison. The judge said she’s not bound by the agreement and that Hixon can’t appeal any sentence if it’s 57 months or less.
The judge set sentencing for Aug. 1. Both Hixon and his lawyer, William Johnson, declined to comment on the plea after court.
Hixon was originally charged with eight counts including securities fraud and one count of lying to FBI agents in a criminal complaint filed by Bharara’s office.
The case is U.S. v. Hixon, 14-mag-0341, U.S. District Court, Southern District of New York (Manhattan).
– Patricia Hurtado, Copyright 2014 Bloomberg.