Ex-Mariner Energy Director Admits Passing Apache Corp. Merger Tip to Son
A former Mariner Energy Inc. (ME) director pleaded guilty to passing inside information about the company’s planned acquisition by Apache Corp. (APA) to his son.
H. Clayton Peterson, 65, of Denver, a retired former Arthur Andersen partner who also serves on the boards of Re/Max International Inc. and Lone Pine Resources Inc., pleaded guilty to conspiracy and securities fraud today in Manhattan federal court. His son, Drew, 35, a financial adviser from Denver, also pleaded guilty to the same charges today.
Clayton Peterson, who was appointed to Mariner’s board in March 2006, said he passed information about the planned transaction in April 2010 to his son. 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.
“I knew that my actions were wrong and I deeply regret my conduct,” Clayton Peterson told U.S. District Judge Robert Patterson. “It has ruined my life and my son’s life and I apologize.”
Apache, the largest U.S. independent oil and natural-gas producer by market value, on April 15, 2010, announced that it had agreed to buy Houston-based Mariner Energy for in a deal valued at the time at $2.7 billion in cash and stock to boost production and reserves in deep waters off the Gulf of Mexico. The purchase was completed on Nov. 10.
SEC Lawsuits
The U.S. Securities and Exchange Commission today sued both Petersons in federal court in Manhattan, claiming that Drew Peterson, his relatives, friends and clients made more than $5.2 million from trading on the information. Of that amount, $5 million was made by the portfolio manager of an unidentified Denver hedge fund.
Both Petersons face as much as 20 years in prison for securities fraud and five years for conspiracy and were ordered released on $500,000 personal recognizance bonds.
“Clayton Peterson has accepted responsibility for his conduct in this matter, which was an aberration from his otherwise long and distinguished career,” Clayton Peterson’s attorney, Steven Glaser, said in a statement. “Mr. Peterson looks forward to putting this chapter of his life behind him.”
According to the SEC, Clayton Peterson took part in a directors’ conference call on April 7, 2010, in which Apache’s offer to buy Mariner was discussed.
He then called Drew Peterson, telling him to buy shares of Mariner stock for his sister, and in the days that followed, Drew Peterson bought more stock for his sister, for himself and for other family and friends, according to the SEC. Apache and Mariner announced the transaction April 15, causing Mariner’s share price to rise 42 percent, the SEC said.
To contact the reporters on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.
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