NEW YORK Aug 1 A former investment banker at Evercore Group was sentenced to 2-1/2 years in prison on Friday for engaging in insider trading and using the profits to pay his former mistress so he could maintain a relationship with their child.
Frank Perkins Hixon Jr., a former senior manager at the bank, was also ordered to pay $810,000 in fines and forfeitures to the government and $1.2 million in restitution to Evercore by U.S. District Judge Ronnie Abrams in New York. He previously pleaded guilty in April to six counts, including securities fraud.
Prosecutors accused Hixon of using inside information to arrange trades in the stock of Evercore's parent company, Evercore Partners Inc, and two other companies: Westway Group, which merged last year with EQT Infrastructure II, and Titanium Metals Corp, which was bought last year by Precision Castparts Corp.
In a related civil lawsuit, the U.S. Securities and Exchange Commission said the trades in question occurred in accounts belonging to Destiny Wind Robinson, Hixon's former girlfriend, and his father, Frank Hixon Sr.
Hixon, who is married, ended his relationship with Robinson soon after their child was born in 2008, according to court filings.
Prosecutors also said Hixon lied to federal agents and to Evercore about his conduct.
In a lengthy statement on Friday, Hixon told Abrams that he had engaged in the trading with Robinson as a way of staying in touch with her to avoid losing contact with his daughter. At the time, he said, he was terrified Robinson would disappear.
"It was truly really rooted in deep fear of losing something tremendously important, and a fear that my daughter would lose me, I would lose her, and it would never be explained to her," he said, according to a transcript of the hearing.
A spokesman for the bank has previously said it reported the suspicious trading immediately upon discovering it and cooperated fully with authorities.
Robinson and Hixon's father were not criminally charged but are named as defendants in the SEC's lawsuit.
The criminal case is U.S. v. Hixon, U.S. District Court, Southern District of New York, No. 14-0341. The civil case is U.S. Securities and Exchange Commission v. Hixon, U.S. District Court, Western District of Texas, No. 14-158. (Reporting by Joseph Ax; Editing by Bernard Orr)