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Member, Beacon International Group, Ltd.
CORRECTED: Michael Van Gilder, who resigned as CEO of Van Gilder Insurance Co. last Thursday, was indicted by a federal grand jury in Denver on five counts of insider trading, United States Attorney John Walsh and FBI Denver Special Agent in Charge James Yacone announced Friday.
The office said the case is being prosecuted in conjunction with the U.S. Attorney's Office for the Southern District of New York.
“The U.S. Securities and Exchange Commission, which today filed a complaint charging Van Gilder with civil insider trading violations, conducted a parallel civil investigation and substantially contributed to the criminal investigation of the case as well,” said the U.S. attorney's office in Denver in a statement.
The U.S. attorney's office said that Mr. Van Gilder “allegedly traded based on inside information regarding a Denver oil and natural gas company called Delta Petroleum Corp.”
It said Mr. Van Gilder surrendered to the FBI Friday morning.
According an SEC statement, Mr. Van Gilder learned from a Delta Petroleum insider that another firm was planning to acquire a 35% stake in the company. Mr. Van Gilder then bought Delta Petroleum stock and options contracts, the SEC said.
In addition, “he tipped several others, encouraging them to do the same, including a pair of relatives via an email with the subject line 'Xmas present,''' the statement said.
According to the SEC, Mr. Van Gilder made approximately $109,000 in illegal profits, and others he tipped made approximately $52,000.
In a statement posted on its web site, Van Gilder Insurance said: “Michael Van Gilder has stepped down as chief executive officer of the company for personal reasons” and that Van Gilder President Donald Woods” will assume Mr. Van Gilder's management responsibilities.”
“No impact on the company's strategic direction or on its ability to serve customers is expected as a result of the transition,” according to Van Gilder Insurance.