It's time for public companies to begin worrying about their investor-relations departments.

Bonnie Hoxie, an assistant to Disney's (NYSE: DIS) head of corporate communications, was arrested along with her boyfriend, Yonni Sebbag, yesterday. They were charged with conspiracy and wire fraud, after supposedly trying to sell Disney's quarterly reports to hedge-fund managers before they became public.

Hoxie apparently had access to the earnings releases before they were issued, something that makes perfect sense for a secretary in the corporate-communications department. She then would allegedly pass the information on to Sebbag, who tried to find buyers for the report.

Hedge-fund managers turned them in.

I think I found Hoxie's Facebook page last night. There's a Yonni Sebbag page that is set to private, but one of his friends is a BJ Hoxie. If so, the last status update on her wall is creepily ominous.

"I go shopping shopping shopping!!" reads the entry from last weekend.

This is the kind of news that will send shivers down the collective spines of most investor-relations departments. Companies will have to be more vigilant with their reports.

If there's any irony here, it's that this happened at Disney -- but not because there are crimes allegedly being committed at a family-entertainment conglomerate. I'm just saying that Disney's not the kind of stock to move a great deal after a quarterly report. And when it does move, the ultimate direction is hard to gauge.

Disney posts its quarterly results after the market closes, so let's size up the stock's price action the day after each of its four most recent quarterly reports.


EPS Estimate


Stock Move

















Source: Yahoo! Finance.

See that? Disney beat estimates every time, but the stock either barely moved or seemed to have a mind of its own.

Apple routinely beats analyst estimates, and its stock occasionally gets pummeled on the news. Wal-Mart, meanwhile, posted negative stateside comps in its latest quarter, yet the stock climbed higher.

Earnings don't seem to be meaty fodder for big stock moves anymore, as pre-release hype often leads to selling on the actual news. Information alone is just one part of this mysterious recipe. The real insider-trading tidbits involve premium buyouts with a clear exit strategy. Everything else involves a fair deal of due diligence and guesswork.

Sometimes the news may sound sexy. Heads turned when Goldman Sachs (NYSE: GS) was linked to Galleon's insider-trading scandal last month. Martha Stewart Living's (NYSE: MSO) namesake diva served time for bailing on a stock when she heard the CEO was dumping shares. Why don't we assess the eventual stock moves before dishing out the severity of the misdeeds?

I'm not suggesting that Disney's case isn't a textbook example of insider trading. It clearly is. However, even if hedge funds concluded with their sneak peeks that Disney had a great Q2 report, with better-than-expected adjusted profits and a top-line improvement from all five of Disney's subsidiaries, they would have been burned by the market's mildly negative reaction the next day.

I see all corporate-communications departments on a tighter leash after this case, but the value of this particular insider info was a real dog.

No offense, Pluto.

How does this case stack up against other insider-trading scandals? Share your experience in the comments box below.

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