Former Evercore Group LLC investment banker Frank Perkins Hixon Jr. had an unusual reason to trade on secrets he stole from clients, authorities said: he needed the money to pay child support to his ex-girlfriend.
Hixon, who was an Evercore managing director until January, was arrested yesterday and charged with insider trading. Separately, the U.S. Securities and Exchange Commission sued Hixon, 56, and his girlfriend, Destiny Robinson, 36, with whom he fathered a child, the regulator said. The trading earned almost $1 million, the SEC said.
“Text messages between Hixon Jr. and Robinson suggest he was generating the illegal proceeds in lieu of formal child support payments,” the SEC said in a statement.
Hixon, known as Perk, is among dozens of Wall Street professionals to be accused of insider trading. His arrest comes two weeks after U.S. prosecutors won the conviction of former SAC Capital Advisors LP manager Mathew Martoma. U.S. Attorney Preet Bharara has won 79 insider cases, and lost none, in a crackdown that began in October 2009.
Hixon, who lives in New York, is accused of using inside information to trade shares of three companies including Evercore, the investment bank founded by ex-U.S. Deputy Treasury Secretary Roger Altman. Robinson wasn’t the only beneficiary of his scheme, authorities said. Hixon also traded for the account of his father, an 80-year-old retiree.
“Another high-ranking financial official allegedly broke the law and abused his position,” George Venizelos, head of the FBI’s New York office, said in a statement.
Hixon faces eight counts including securities fraud and lying to FBI agents. Securities fraud carries a maximum penalty of 20 years in prison. Hixon was released on a $5 million bond after appearing in Manhattan federal court.
His lawyer, Bill Johnson, declined to comment on the arrest.
Robinson, who lives in Austin, and Frank P. Hixon Sr., of Johns Creek, Georgia, were sued by the SEC and not criminally charged. Hixon’s father didn’t immediately return a telephone call. Robinson, who according to the SEC has a 5-year-old child with Hixon, couldn’t be reached for comment.