Federal securities authorities will take a second run at trying to prove to a Denver jury that one-time oil executive Roger Parker a decade ago leaked insider information to his buddies so they could profit from it.
The new trial is set to begin Tuesday before U.S. District Judge John Kane — exactly five years from the day the U.S. Securities and Exchange Commission levied its allegations.
The SEC maintains the 56-year-old former chief executive of Delta Petroleum told at least two friends — who then told others — that late-billionaire Kirk Kerkorian in 2007 was poised to drop $684 million into the company, an investment that surely would make the company’s stock price climb once it was announced.
It did, by about 19 percent, and resulted in illicit profits topping $1.5 million to those who bought-in before the January 2008 announcement was made. Parker, however, never personally traded on any Delta stock at the time and said the tips were merely idle chatter among friends.
But government attorneys in September had a hard time proving their case to a federal district court jury following a two-week trial, which ended with a hung jury after a week of deliberations, leaving the SEC little choice but to start over.
The witness list has included billionaire George Solich, high-powered attorney Norm Brownstein, Kerkorian confidant and executive Dan Taylor, and oilman John Wallace, who is married to Beth Bowlen, daughter of Denver Broncos owner Pat Bowlen.
Along with Kerkorian, who died in June 2015, other key figures now dead include Edward Michael “Tiger” Davis, a former chauffeur who entered the oil-and-gas business after marrying former Denver Post owner Helen Bonfils. Davis, who died in September 2016, was a Las Vegas resident who had done business with Delta as far back as 2003 and introduced Parker to Kerkorian.
Though Parker’s team of lawyers has pointed to the mistrial as a reason to dismiss the civil lawsuit, federal lawyers appear determined to prove the now-bankrupt oilman somehow profited from the leaks rather than, as Parker has maintained, his buddies acted alone and without his knowledge.
The government has said the payoffs were less obvious, in the form of loans with sweetheart terms, golf outings, private jets and Las Vegas jaunts to tony resorts. An avid golfer, Parker maintained memberships at some of Colorado’s prestigious country clubs, and even purchased the Cherry Hills Village mansion of former-petroleum industry magnate and Castle Pine Golf Club founder Jack Vickers, whom Parker is said to idolize.
The goverment’s investigation into the Kerkorian deal came after it delved into insider trading at Mariner Energy in 2010, which ended with a trio of convictions and about $5 million turned over to the government. The one name laced through the two investigation is Drew “Bo” Brownstein, a former hedge fund manager who pleaded guilty to federal securities fraud in the Mariner case.
Brownstein has been called as a witness against Parker because he allegedly profited from info about Kerkorian’s buy-in to Delta that the government says came to him from Scott Reiman, whom Parker told. Reiman and Brownstein each has invoked their Fifth Amendment right against self-incrimination and refused to testify.
The SEC first went after another Parker chum in 2012: fallen insurance executive Michael Van Gilder, who eventually pleaded guilty to a federal criminal charge of illegal insider trading for having pocketed about $86,000 from his Delta stock trades. Van Gilder has maintained that Parker never knew of his trades, nor that he told family members to buy stock, insider information that even Van Gilder’s stock broker traded on for himself.
The SEC next went after Reiman, who runs Denver-based Hexagon Inc. and later paid back nearly $889,000 in profits and penalties in a deal with the SEC, an agreement in which he neither admitted nor denied wrongdoing. For months Reiman had been identified in the Delta investigation only as “Friend A,” an anonymity that led to wild speculation among the city’s financial elite as to that person’s identity.
Then came Parker, whom the SEC has dogged almost as hard as executives at Kerkorian’s Tracinda Corporation have done shortly after their buy-in began to unravel. Parker took a $7.5 million personal loan from Tracinda in 2009 and the two sides have battled bitterly over its repayment ever since, especially after Parker left as Delta’s CEO and the company pushed into bankruptcy.
Parker filed for his own bankruptcy protection just after the SEC sued him. That bankruptcy is ongoing, recently with efforts to foreclose on the former Vickers mansion just across from the Cherry Hills Country Club. The court ordered the Tudor-style wood-paneled home sold years ago, but has had few buyers, first listing at $11 million and now at $8.7 million.