The
Securities and Exchange Commission has charged the Denver-based owner of an investment firm with insider trading.

The SEC says that Scott Reiman, founder and president of the investment firm Hexagon, received repeated tips about Delta Petroleum from the chief executive of a private investment firm, Tracinda, which was making a large investment in the oil and gas firm.

Tracinda’s $684 million investment was made public on December 31, 2007, causing Delta Petroleum’s stock price to jump nearly 20 per cent. Reiman had made trades on three occasions in late November and early December 2007, including one within minutes of getting off the phone with Roger Parker, who was then CEO of Tracinda, the SEC says.

It has previously charged Parker, along with another trader, Michael Van Gilder, as part of this insider trading investigation.

“Reiman took advantage of highly confidential information that he obtained through his friendship with Parker and traded on it for significant and entirely illegal profits,” said Daniel Hawke, chief of the SEC enforcement division’s market abuse unit.

Reiman neither admitted nor denied the charges but agreed to pay disgorgement of $398,000 plus prejudgment interest of $93,567 and a penalty of $398,000. The SEC’s order bars him from acting as an officer or director of a public company for a period of five years, and bars him from the securities industry with a right to reapply in five years’ time.

The SEC’s order charged Reiman with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.