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The Denver owner of a hedge fund was sentenced Wednesday to a year and a day in prison after he admitted making up to $2.5 million by trading on insider information he got from a longtime friend.
U.S. District Judge Robert Patterson also ordered 35-year-old Drew "Bo" Brownstein to serve six months of home confinement and to perform 500 hours of community service. He fined him $7,500 and signed an order requiring him to forfeit $2.4 million in illegal profits.
"We've got too much greed in this country these days, and it's not confined entirely to Wall Street either," Patterson said. He even gave a nod to the Occupy Wall Street movement, saying their message that "a lot of greed has swept the country" was making an impression.
"I think most people somewhat agree with that," Patterson said.
The judge's sentence was considerably less than the three to four years in prison called for by sentencing guidelines. He credited Brownstein for a considerable amount of charity and noted his good deeds.
Given a chance to speak, Brownstein said he was "deeply sorry for having made a terrible mistake."
He added: "My horrendous judgment has taken everything from me, deeply injuring my family, my friends and my investors. Although the money has been repaid, my reputation will take the rest of my lifetime to repair."
The owner of Big 5 Asset Management LLC had admitted buying shares of Mariner Energy Inc. in April 2010 after learning from a friend that the oil and gas company was going to be acquired by Apache Corp. for $3.9 billion.
Papers filed by the Securities and Exchange Commission say Brownstein actually made more than $5 million in illegal profits. The $2.5 million described at sentencing related solely to the criminal charge.
The judge said Brownstein acted on inside information he received from Drew Peterson, another Denver investment adviser, who got tipped about the acquisition from his father, Clayton Peterson, who sat on Mariner's board. The father and son pleaded guilty in August. The father received two years' probation and the son is scheduled to be sentenced April 11.
In a release, U.S. Attorney Preet Bharara said Brownstein and the others "took secret information obtained from the corporate boardroom and used it to make illegal stock trades. The boardroom should be where investors' interests are protected, not a money trough for tippees of the wealthy and connected."