Hedge fund CEO admits $2.5M inside trade scheme (AP)

[Yahoo! News]

AP - The Denver owner of a hedge fund has pleaded guilty to securities fraud in New York City.

Drew "Bo" Brownstein, 35, entered the plea in U.S. District Court in Manhattan, agreeing to serve up to four years in prison when he is sentenced on Dec. 20.
The hedge fund portfolio manager admitted buying shares of Mariner Energy Inc. in April 2008 after learning from a longtime friend that it was going to be acquired by Apache Corp.
The Securities and Exchange Commission said Brownstein made more than $5 million in illegal profits by trading in his personal accounts, the accounts of relatives and for two of his hedge funds ahead of the oil and gas company's $3.9 billion takeover by Apache in April 2010. The up to $2.5 million Brownstein admitted to in court was the amount of money related to the criminal charge but an SEC civil case against him cited the higher figure as being the actual profits.

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