Michael Van Gilder, who resigned as CEO of Denver-based Van Gilder Insurance Corp. last October after being indicted on five counts of insider trading, has been sentenced to five years of probation, six months of house arrest and a $5,000 fine.

At a sentencing hearing held Wednesday in Denver, Senior U.S. District Court Judge Wiley Y. Daniel decided against imposing the maximum 12- to 18-month sentence that would normally be prescribed under federal guidelines for such a crime, citing Mr. Van Gilder's character as a member of the community and that fact that he had already paid dearly for his crime, according to his attorney, Robert Miller of Perkins Coie in Denver.

Mr. Miller said he had argued for probation, noting that Mr. Van Gilder has made significant contributions to the community and had already paid for the crime by losing both his job and his business. Moreover, as part of the plea agreement reached with the U.S. Attorneys Office in May, he also had paid back the $86,100 in the alleged ill-gotten gains as a result of the insider trading incident.

Mr. Van Gilder had originally pleaded not guilty to the five-count securities fraud indictment handed down by a federal grand jury last October. But he changed his plea in May as part of a plea agreement, admitting to a single count in connection with illegally profiting from a December 2007 purchase of stock in Delta Petroleum Corp. just before a private investment firm owned by billionaire Kirk Kerkorian acquired a 35% stake in the oil and gas exploration company.

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If Mr. Van Gilder had been convicted on all five counts, he would potentially have faced a maximum penalty of up to 100 years in prison and $25 million in fines.

Van Gilder Insurance is a privately held insurance brokerage firm in Denver with more than 130 employees. It ranks as the 94th largest broker of U.S. business with $20.4 million in 2011 revenues, according to Business Insurance's latest ranking of U.S. brokers.

The company was not a subject of the fraud investigation and did not face any securities charges.

Meanwhile, a parallel civil suit filed by the U.S. Securities and Exchange Commission against Mr. Van Gilder and Roger Parker, the former CEO of Delta Petroleum, is proceeding in the same federal court where Mr. Van Gilder was sentenced.

“Working closely with our partners in the U.S. Attorney's Office in the Southern District of New York, the FBI and the SEC, we were able to obtain a conviction and sentence from a well-known Denver executive whose greed got the best of him,” said Colorado U.S. Attorney John Walsh.