Insider Trading Crackdown against Father and Son Duo

The newest “victims” of the government’s crackdown on insider trading: are father and son  H. Clayton Peterson, 65 and Drew Peterson, 35.  The pair from Denver pled guilty last week, each to one count of securities fraud and one count of conspiracy to commit securities fraud. Clayton Peterson, a board member of Houston-based Mariner Energy is accused of providing his son with insider information about an upcoming acquisition. In April, 2010, Apache Corp. was set to purchase Mariner, which was trading at $17 per share, for $25 a share. Drew Peterson, who traded on the information himself, was also found to have shared the information with family and friends, namely the Chief Executive of a Denver hedge-fund. 

The hedge-fund manager purchased a total $225,000 shares in Mariner stock in addition to over $5,000 options. When the business deal was publically announced on April 15, 2010, he sold his shares and options, making out with a net profit of roughly $5 million. Drew Peterson and his friends are said to have made out with approximately $150,000.

The SEC has filed civil claims against the Petersons, requesting the court to order the return of all illegally obtained money.  The possibility of up to a 25-year sentence in prison and fines of $5.25 million each looms overhead.

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