A federal judge in Manhattan on Wednesday sentenced former Denver hedge-fund manager Drew “Bo” Brownstein to a year and a day in prison and ordered him to forfeit $2.44 million made from illegal insider trades.
Brownstein’s sentence also includes three years of supervised release after prison, including six months’ home confinement and 500 hours of community service. He also must pay a $7,500 fine.
“I want to tell you how sorry I am for having made a terrible mistake,” Brownstein told U.S. District Judge Robert Patterson. “I take full responsibility for my actions, and I will have to live with this for the rest of my life.”
Patterson told Brownstein he considered his offense serious.
“We’ve got too much greed in this country these days, and it’s not confined entirely to Wall Street either,” Patterson said.
Brownstein, 35, pleaded guilty in October to making illegal trades on confidential information in April 2010 about a pending $2.7 billion purchase by Apache Corp. of Mariner Energy.
Brownstein had received the information from his friend, Drew Peterson, who had heard it from his father, H. Clayton Peterson, a Mariner director.
Brownstein reaped nearly $2.5 million in profits for his Big 5 Asset Management firm and about $130,000 for himself, according to federal prosecutors.
Although the insider-trading charges could have carried up to 20 years in prison, Brownstein’s plea agreement capped the maximum sentence at 46 months, or just under four years.
Federal probation officials recommended a sentence of six months in prison, citing Brownstein’s remorse and “significant” support from friends and family.
Those providing written statements to the court on Brownstein’s behalf included former U.S. Sens. Tim Wirth and Hank Brown; University of Colorado at Boulder football coach Jon Embree; former Denver Broncos wide receiver Brandon Stokley; colleagues and clients at Big 5; as well as friends and family members.
Brownstein is the son of well-known Denver attorney and political lobbyist Norman Brownstein.
Bo Brownstein’s sentence was less than the maximum possible but more severe than that given to H. Clayton Peterson, who helmed accounting firm Arthur Andersen’s Denver office through the 1990s.
Peterson was fined $400,000 and sentenced to two years’ probation after pleading guilty in August to securities fraud and conspiracy.
Drew Peterson pleaded guilty to the same charges after netting about $150,000 from illegal trades. His sentencing, initially scheduled for Wednesday, was pushed back to April 11.
Big 5 Asset Management is being liquidated. A representative for the Brownstein family declined to comment on the sentence.
The Associated Press contributed to this report.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
