By Emily Flitter and Nate Raymond
NEW YORK Feb 21 U.S. authorities on Friday
accused a former investment banker at Evercore Group of
engaging in insider trading, and a federal regulator said he
used the money to pay a former mistress to support their child.
Frank Perkins Hixon Jr, 55, a former senior manager at
Evercore, was accused of using inside information to arrange
trades in the stocks of Evercore and two other companies in
accounts held by Hixon's ex-girlfriend and his father, according
to court records.
The other two companies were Westway Group, which merged
last year with EQT Infrastructure II, and Titanium Metals Corp,
which was purchased last year by Precision Castparts
A criminal complaint identified the holders of the accounts
as the mother of Hixon's young child in Austin, Texas and a
close relative in Johns Creek, Georgia. The U.S. Securities and
Exchange Commission in a parallel lawsuit, said the accounts
belonged to Destiny Wind Robinson, Hixon's former girlfriend,
and Frank Hixon Sr, his 80-year-old father.
The criminal complaint said the trades brought Hixon more
than $600,000 in profits, while the SEC's civil case put Hixon's
profits as $950,000.
"This is the same old song: Another high-ranking finance
official allegedly broke the law and abused his position in a
thinly veiled attempt to make illegal trades," FBI Assistant
Director-in-Charge George Venizelos said in a statement.
$5 MILLION BAIL
Hixon, who worked in Evercore's mining and metals group, was
arrested Friday morning at his apartment in New York. He was
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.
At a hearing Friday afternoon in New York, a federal
magistrate set bail at $5 million. The SEC, meanwhile, obtained
an order from a judge in Texas freezing $1.2 million held in
William Johnson, a lawyer for Hixon at King & Spalding,
declined comment. Neither Hixon's father nor a lawyer for
Robinson responded to requests for comment.
George Sard, a spokesman for Evercore, issued a statement
saying the company reported its concerns to regulators and
launched an internal investigation that ultimately led in
January to the termination of Hixon, who he called a "rogue
"We have never had a situation like this before in
Evercore's nearly 20-year history," Sard said.
The case was the latest in a string of insider trading
prosecutions by the office of Manhattan U.S. Attorney Preet
Bharara in a crackdown that has resulted in the convictions of
According to court papers, the fraud was detected after
Evercore received inquiries in early 2013 from the Financial
Industry Regulatory Authority.
Evercore confronted Hixon about whether he knew anything
about trading in accounts belonging to Robinson and his father
Frank Sr, the SEC said. Hixon denied recognizing either name,
the SEC said.
Confronted again with information that he did know them,
Hixon falsely claimed he knew Robinson, whose legal name is
Nicole, by a different first name and didn't recognize the name
of the city his father lived in, the SEC said.
The criminal complaint said Hixon sent Robinson checks for
$10,000 a month for at least a year, written to her in her legal
Hixon, who is married, told authorities he had ended his
relationship with Robinson around the time their child was born,
in 2008, according to the criminal complaint.
Text messages between the two suggest the illegal trading
was intended at least partly to support their child, the SEC
According to the criminal complaint, in late 2011, as
executives from Westway Group, a New Orleans-based liquid
storage and feed company, discussed their merger plans with
Evercore's mining and metals team, Robinson's online trading
account registered trades in Westway shares made by someone
logged in from a computer at Evercore's Manhattan offices.
Similar activity in Robinson's account in shares of Titanium
Metals Corp also corresponded with Hixon's work on the Titanium
Metals Corp merger.
According to the court documents, Hixon also coordinated
with his father on trades in the stocks, calling him after
learning information about the mergers and about Evercore's
The criminal case is U.S. v. Hixon, U.S. District Court,
Southern District of New York, No. 14-mj-0341. The civil case is
U.S. Securities and Exchange Commission v. Hixon, U.S. District
Court, Western District of Texas, No. 14-158.