Entries in Michael Douglas (1)


FBI and Michael Douglas Turn Up the Heat on Insider Trading

Alberto E. Rodriguez/Getty Images(WASHINGTON) -- The FBI has enlisted Michael Douglas, best known for his role as the ruthless Wall Street executive Gordon Gekko in the film Wall Street, in the bureau’s efforts to crack down on the rising number of insider trading cases. While Gekko lived by the mantra that “greed, for lack of a better word, is good,” Douglas is now asking corporate employees and financial traders to report insider trading and securities fraud to the FBI.

Appearing in a public service announcement that begins with a scene from Wall Street, Douglas says, “In the movie Wall Street I play Gordon Gekko, a greedy corporate executive who cheated to profit while innocent investors lost their savings. The movie was fiction, but the problem is real.

“Our economy is increasingly dependent on the success and the integrity of the financial markets,” Douglas says in the video produced by the FBI.  “If a deal looks too good to be true, it probably is. For more information on how you can identify securities fraud, or to report insider training, contact your local FBI office. Or submit a tip online at”

A report released by the FBI on Monday on financial crimes noted that there has been an increase in the number of insider trading cases.

“While the number of cases involving the falsification of financial information remains relatively stable, the FBI has observed an increase in the number of insider trading cases. Insider trading has been a continuous threat to the fair and orderly operation of the U.S. financial markets and has robbed the investing public of some degree of trust that markets operate fairly,” the report noted, which looked at financial crimes from Oct. 1, 2009 to Sept. 30, 2011.

“We couldn’t be more excited about Mr. Douglas.  The antagonist role that he played as Gordon Gekko suggested to us there would be no better voice to put this message out insider trading and securities fraud,” said FBI Special Agent David Chaves from the FBI’s New York field office, where he is the supervisor of the corporate and securities fraud unit.

“Greed is a factor that we always have to consider.  Our hope is that we continue to be proactive and aggressive in this area,” Chaves said.

Insider trading has been prosecuted by the U.S. Attorney’s Office for the Southern District of New York in a number of high-profile cases with 66 individuals being charged since August 2009. The district successfully prosecuted hedge fund manager Raj Rajaratnam, who operated an elaborate insider trading operation. Rajaratnam and others indicted in the case netted over $60 million in profits.

The case was also unique because the FBI and prosecutors used court-authorized wiretaps to build the case, something that the FBI and Justice Department have been doing more frequently in other corporate fraud cases.

In January the Securities and Exchange Commission and the Justice Department charged seven individuals from hedge funds Diamondback Capital Management LLC and Level Global Investors LP for illegally trading on inside information about Dell and Nvidia and allegedly netting $78 million in profits.

The FBI on Monday also released video from an insider trading case involving Walt Disney, the parent company of ABC, where Bonnie Hoxie, a former assistant to a top executive at Disney, passed information to her boyfriend Yonni Sebbag, a.k.a "Jonathan Cyrus." Sebbag sent multiple inquires to hedge funds and tried to peddle the inside information he was getting from Hoxie. The FBI intervened and posed as a hedge fund interested in buying the inside information.

On the FBI video Sebbag bragged that he had top information, telling an FBI undercover agent, “Any information that comes through my executives, like CEO, any information.”

“What motivates me is money.” Sebbag said on the FBI video.

Sebbag asked the undercover agent “You’re not FBI or SEC, right?... we’re OK, right?”


“Well, I’m the CIA,” the undercover agent responded -- the men sharing a laugh as they proceeded with the deal.

Both Bonnie Hoxie and Yonni Sebbag pleaded guilty to wire fraud and conspiracy to commit securities and wire fraud. Hoxie only received a sentence of four months home confinement after a judge agreed she was manipulated by Sebbag, who was sentenced to 27 months in federal prison.

The FBI report released Monday noted that in 2011 the FBI had 726 pending corporate fraud cases and noted that the Bureau secured $2.4 billion in restitution and over $16 million in fines from corporate criminal defendants.

Copyright 2012 ABC News Radio

ABC News Radio