Saturday, 22 October 2016
Last updated 21 hours ago
Oct 21 2011 | 11:55am ET
Hedge fund manager Bo K. Brownstein, head of Big 5 Asset Management, is expected to plead guilty to insider trading charges on Friday.
Brownstein, whose family is prominent in Denver political circles, is expected to admit to profiting from a confidential stock tip about a corporate merger, reports DealBook, citing two people briefed on the case.
According to federal prosecutors, Brownstein’s tip came from H. Clayton Peterson, a former director of Denver-based Mariner Energy, who told his son about a forthcoming $2.7 billion takeover of Mariner by the Apache Corporation in April 2010.
The son, money manager Drew Peterson, earned an estimated $150,000 trading on the tip. Prosecutors say he also passed the info along to Brownstein, a close friend, who purchased Mariner shares and options.
Brownstein has not been identified by federal prosecutors in their court filings which refer to a “co-conspirator” of the Petersons who earned over $5 million in illegal profits for his fund and his relatives.
The Petersons both pled guilty to insider trading in August. Clayton was sentenced to two years probation while Drew has yet to be sentenced.