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.
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.