The Nexus Between Insider Trading and Infidelity

Moneybox
A blog about business and economics.
Feb. 27 2014 2:36 PM

The Nexus Between Insider Trading and Infidelity

Why would a prosperous business executive risk his freedom to engage in a little insider trading? In a fascinating column, Gary Silverman observes that the motive is often not so much money as love—or, rather, a need for money that can be disguised from your wife in order to give it to your mistress:

The government’s allegations portray Mr Hixon – a 56-year-old banker widely known as “Perk” – as a classic case of a married man who needed money that his wife wouldn’t know about. The US Securities and Exchange Commission says he had fathered a daughter – now five years old – during the course of a years-long relationship last decade with a woman about two decades his junior called Destiny Wind Robinson.
To help pay for Destiny’s child, as it were, the government alleges that Mr Hixon trafficked in sensitive corporate secrets – a store of value well suited for a player looking to pay off personal obligations without leaving a paper trail. Relying on material, non-public information that he obtained as a senior Evercore adviser on mining and metals deals, Mr Hixon engineered stock trades in his former lover’s brokerage account that yielded almost $900,000 in profits, according to the SEC.
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Handing out money is going to get you caught. Handing out tips can be done covertly. Silverman also cites the case of James McDermott who gave a mistress $80,000 worth of stock tips.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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