The unnamed individual who profited handsomely on information that billionaire Kirk Kerkorian was buying into publicly traded Delta Petroleum in late 2007 has denied being tipped by the oil company’s chief executive.
Identified in federal court papers only as “Friend A” of then-Delta CEO Roger Parker, the individual has told securities investigators that the $700,000 profits he made trading on Delta stock just before Kerkorian’s investment wasn’t tied to Parker, according to a new filing.
The filings do not say how or from whom Friend A obtained the information that turned so lucrative.
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Parker is being sued by the U.S. Securities and Exchange Commission for allegedly being the tipster about a $684 million investment Kerkorian-owned Tracinda Corp. was about to make in his company, a deal that allegedly brought illegal insider-trading profits to several of Parker’s associates and friends.
The identity of Friend A has been the subject of rampant speculation among Denver’s corporate elite, particularly at the country clubs where Parker and his friends are members, and the tony restaurants where they frequently hang out.
Parker says in a new filing in the case in U.S. District Court that “the SEC now knows that Friend A denies having received any material non-public information from Mr. Parker.”
Parker said in May that any allegation that he gave Friend A any insider information that became the $700,000 payday was wrong, but, until now, there has been no public indication that the mystery investor had talked to SEC investigators.
Nevertheless, Parker asserts that in the years since the SEC filed its case against Parker and close friend Michael Van Gilder, “the SEC has learned information that flatly contradicts those initial assumptions and legal theories,” yet the agency persists in alleging Friend A profited from information Parker shared with him.
However, the filing does not say Friend A did not profit from trading on Delta stock at the time of Kerkorian’s buy-in, or that Friend A didn’t get the information from someone else.
Although Friend A’s identity has remained a closely guarded secret, the SEC last year filed a list of those it expected to depose in the case — names that included Edward Michael “Tiger” Davis, a former chauffeur who entered the oil-and-gas business after marrying former Denver Post owner Helen Bonfils. Davis, now a Las Vegas resident, had done business with Delta as far back as 2003.
It was Davis who introduced Parker to Kerkorian, a pairing that landed Davis about $5 million worth of Delta shares.
Other names included former executives at Delta, including Stanley “Ted” Freedman, John Wallace and Kevin Nanke.
Delta went bankrupt in December 2011 and emerged as Par Petroleum.
The Delta investigation was cobbled together following the SEC’s successful investigation into insider deals at Mariner Energy in 2010. Although it hasn’t yielded the same results — there were a trio of convictions in the Mariner case with nearly $5 million turned over to prosecutors — it has left a mark.
Van Gilder admitted to illegal insider trading on Delta stock, including pleading guilty to a separate federal felony charge related to those trades. He resigned his post as CEO of his 100-year-old family business, Van Gilder Insurance, which has since been sold, and has started a new project in the food industry.
Investment adviser and close Parker associate Scott Reiman in April 2013 settled with the SEC in an administrative hearing, agreeing to hand over about $900,000 in profits and penalties tied to trades he made based on conversations the SEC says he had with Parker about the Kerkorian buy-in.
Despite the settlement, Reiman has not been identified in the civil lawsuit and has not been formally accused of any wrongdoing in the Delta matter.
The SEC’s amended complaint against Parker included allegations that an unidentified relative and a co-worker of Van Gilder’s also profited from the illegal insider information, but they have not been named.
Van Gilder’s broker on the Delta stocks, Stephen Diltz of Illinois, in February agreed to hand over to the SEC more than $60,000 he made on his own Delta trades based on his client’s purchases.
Parker has been battling personal bankruptcy since before the SEC filed its lawsuit against him in November 2012, and has been dodging protracted court fights with Tracinda as it tries to collect on a personal $7 million loan it gave Parker while he was Delta’s CEO.
David Migoya: 303-954-1506, firstname.lastname@example.org or twitter.com/davidmigoya