The Darth Vader Defense to Insider Trading

luke i am your father

Frank Hixon Jr. is trying to evade insider trading charges by denying he knew his father. His father is not a malevolent cyborg. His name is even easier to decipher than Darth Vader; It’s Frank Hixon Sr.

Hixon is challenging the charges so I have only the government’s version of the facts. Perhaps he has some better explanations or perhaps the SEC and DOJ do not have the evidence to back up their charges.

Hixon was investment banker focusing on the mining, metals and materials industries. According to the SEC complaint, there was suspicious trading around a few of the deals he worked on, including his own company’s earnings announcements. FINRA inquired and his firm circulated a list of suspicious traders. Frank Hixon Sr. of Duluth, Georgia and Destiny Robinson of Austin, Texas were on the list.

According to the SEC, Hixon denied realizing that those two people on a list of suspected transactions were his father and the mother of his child.

His father had lived in the same home for two decades. In 2006, the area incorporated as Johns Creek. Hixon claimed that “Hixon” was a common name in the South and that his father lived in Johns Creek, not Duluth. Duluth and Johns Creek share a zip code.

Vader: No, I am your father.
Skywalker: No. No! That’s not true! That’s impossible!
Vader: Search your feelings; you know it to be true!

As for Ms. Robinson, Hixon claimed he only knew her as Nicole, not Destiny. The SEC complaint de-bunks this lame defense because it has text messages that makes it clear he knew her by both names. The FBI also found checks he had written to her using “Destiny” name. The SEC alleges that Hixon was using the insider trading profits to pay child support to Ms. Robinson. The trading logs tie many of the suspicious trades back to the IP address of Hixon’s firm.

Hixon was fired by his firm. The Department of Justice must have thought that Hixon’s lies were egregious because the U.S. Attorney has also brought criminal charges. The DOJ brought seven charges of securities fraud and a false statement charge.