Delta Petroleum ex-CEO charged in insider trading
The federal government Wednesday said it has brought civil charges against the former head of Delta Petroleum in connection with an alleged insider trading scheme that generated more than $890,000 in illicit profits.
Englewood resident Roger Parker, 51, leaked confidential information to insurance executive and close friend Michael Van Gilder, 45, of Denver and at least one other friend in late 2007 about plans by the investment firm Tracinda Corp. to buy a $684 million, 35 percent stake in the company, the Securities and Exchange Commission says.
Denver-based Delta owned oil and gas interests centered in the Collbran area and eventually went into bankruptcy. This summer it completed a reorganization plan in which it changed its name to Par Petroleum Corp. and pooled its assets in Mesa and Garfield counties with Laramie Energy II in a joint venture.
The SEC previously charged Van Gilder in connection with the alleged scheme, and he also is being prosecuted criminally on five insider trading counts. He has pleaded not guilty.
Federal authorities have not charged or publicly identified the other friend of Parker’s allegedly involved in the scheme, but say that friend alone reaped $730,000 in profits based on advance knowledge of the Tracinda deal. Van Gilder’s profits totaled $109,000, and others Van Gilder tipped off profited by a total of more than $50,000, the SEC says.
As for the possibility of further criminal charges in the case, Jeff Dorschner, spokesman for the U.S. Attorney’s Office in Colorado, said an investigation into the case continues.
Tracinda is owned by billionaire Kirk Kerkorian. The SEC says Delta’s stock rose nearly 20 percent due to the Tracinda investment.
It says Parker repeatedly apprised Van Gilder and the other friend of developments as talks leading up to the deal progressed, despite his obligation to protect nonpublic information as the CEO. It said Van Gilder and the other friend then loaded up on Delta stock and highly speculative options contracts, and a relative, broker and co-worker of Van Gilder did the same based on Van Gilder’s advice.
The SEC says Van Gilder also called Parker at home three times one evening in 2007 because he was considering selling Delta securities due to a negative news article on the company. Parker allegedly shared confidential information about earnings results that were to be announced later that week — and would include production and revenue numbers that exceeded previous Delta projections — and Van Gilder instead bought 1,250 more shares, and urged a friend to buy more as well, the SEC says.
The SEC said it is seeking a judgment ordering Parker and Van Gilder “to disgorge their and their tippees’ ill-gotten gains plus prejudgment interest” and to pay penalties.
Earlier this month, Parker retired as chief executive officer, chair and a director of Denver-based Recovery Energy, Inc., a company he joined in 2009. Van Gilder resigned as CEO of Van Gilder Insurance Co.