Peterson’s Insider Trading Tip Spread
Peterson committed insider trading when he tipped his son, Drew Peterson, off that Mariner Energy was going to be acquired by Apache Corporation (APA) His son had made $150,000 on the tip. A sentencing date for Drew has not been set. Drew Peterson passed the news of Apache’s takeover of Mariner to the CEO of a Denver-based hedge fund, who in turn passed the tip to family and friends, netting more than $5 million for his fund and relations. According to the New York Times, “the criminal complaint does not identify the hedge fund manager, referring to him only as a co-conspirator. But according to people involved with the case, he is Bo K. Brownstein, head of Big 5 Asset Management, which is based in Denver, and a former banker at Credit Suisse in New York.”
Peterson Gets a Break and Receives a Lighter Sentence
Federal sentencing guidelines required that Peterson serve 12 to 18 months in jail. Instead, Judge Robert A. Patterson of Federal District Court in Manhattan, opted to go with the longer probationary period. Peterson’s probation officer’s recommendation also recommended that Peterson not serve jail time because he had admitted his guilt and had led an exemplary life otherwise. Peterson had spent 33 years at Arthur Andersen, the accounting firm embroiled in the Enron scandal. Peterson also served on the boards of the private company Re/Max International and Lone Pine Resources (LPR) before resigning in the wake of the insider trading charges.