A former director of Mariner Energy, the independent oil and natural gas producer Apache agreed to acquire last year for $2.7 billion, was found guilty of insider trading on Friday. H. Clayton Peterson, 65, plead guilty to pleaded guilty to conspiracy and securities fraud in New York court on Friday.
Peterson passed insider knowledge of Apache's takeover offer for Mariner on to his son, Drew, 35, a Denver-area financial adviser. Drew Peterson said he bought shares of Mariner stock based on the tip and passed on the information to another unidentified person who also traded on it, according to Bloomberg News.
The Securities and Exchange Commission sued the Petersons, alleging $5.2 million in ill-gotten profits were made on the insider knowledge of the Apache/Mariner deal. Of that amount, $5 million was made by the portfolio manager of an unidentified Denver hedge fund, Bloomberg reported.
The father and son could each face up to 20 years in prison and $500,000 in fines. Texas-based Apache (APA) is the largest U.S. independent oil and natural gas producer by market value.