The Securities and Exchange Commission on Wednesday announced charges against the former CEO of a Denver, Colo.-based oil-and-gas company at the center of an insider trading scheme involving a Colorado insurance executive that the SEC began prosecuting last month.
According to the SEC’s complaint, the insider trading occurred in advance of Delta Petroleum Corp.’s public announcement that Beverly Hills, Calif.-based private investment firm Tracinda had agreed to purchase a 35 percent stake in the company, which pushed its stock value up by nearly 20 percent.
The SEC initially charged insurance executive Michael Van Gilder for his illegal trading in the case, and is now additionally charging his source: Delta’s then-CEO Roger Parker.
Van Gilder, who is charged with five counts of insider trading, is taking an indefinite leave of absence as an employee of the company and as a member of its board of directors. Van Gilder pleaded not guilty in federal court in Denver in late October after the company said he was stepping down as chief executive for personal reasons. A January trial has been set for Van Gilder.
Van Gilder is accused of trading Delta stock in late 2007 and early 2008 based on nonpublic information, including information from an executive that Delta Petroleum was doing fine despite a published report expressing pessimism.
Don Woods, president of Van Gilder Insurance, has assumed Van Gilder’s management responsibilities.
The SEC’s amended complaint made public on Wednesday alleges that Parker, who lives in Englewood, Colo., illegally tipped his close friend Van Gilder and at least one other friend with confidential information about Tracinda’s impending investment. Despite his duty as CEO to protect nonpublic information, Parker repeatedly communicated with Van Gilder following meetings and other developments as the deal progressed, the complaint states. Parker also illegally tipped information about Delta’s quarterly earnings. The insider trading in this case generated more than $890,000 in illicit profits, according to the complaint.
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