SEC Charges Scott Reiman with Insider Trading

In the Matter of Scott Reiman, Admin. Proc. File No. 3-15277.  On April 15, 2013, the SEC announced it initiated and settled an administrative proceeding charging Scott Reiman with insider trading.  According to the SEC Order Instituting Proceedings, Reiman is the founder and president of investment firm Hexagon, Inc.  He received repeated tips from Roger Parker who was CEO of Delta Petroleum.  The SEC previously sued Parker alleging that Parker tipped friend Mark Van Gilder with confidential information that private investment firm Tracinda was going to purchase a 35 percent stake in Delta.  After getting a similar tip from Parker, Reiman bought Delta Petroleum stock and option contracts.  When Delta publicly announced the Tracinda investment, Reiman made a significant profit from his Delta holdings.  The SEC’s order charges Reiman with violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  Without admitting or denying the charges, Reiman agreed to pay disgorgement of $398,000 plus prejudgment interest of $93,567 and a penalty of $398,000.  The SEC Order bars Reiman from acting as an officer or director of any public company for a period of five years, bars him from the securities industry with the right to reapply for reentry after five years, and requires him to cease-and-desist from future violations.

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