The U.S. Securities Exchange Commission announced that Stillwater oilman John Special agreed to pay nearly $3 million to settle an insider trading civil complaint against him.
His is the second case stemming from allegations of insider trading involving former Marathon Oil Corp. chairman Dennis Reilley of Oklahoma City. (see Dec. 4 OK Energy Today)The case involved the merger of global medical supply company Covidien PLC with rival Medtronic Inc.
Reilley was on the board of directors at the time of the merger and allegedly told a neighbor of the move, a tip that led to a criminal charge and eventual guilty plea by John Davidson. He is awaiting sentencing.
But it was Davidson who also tipped the 67-year old Special who is president and CEO of Special Energy Corp. and Special Exploration, of the coming merger. Special reportedly made $1.182 million in illicit profits in 2014 from the tip.
The SEC stated that Special also used oilman Michael Murphy who allowed him to trad in a brokerage account in his name. Murphy was unaware that the purchases ha been carried out in violation of securities law. Murphy agreed with the SEC to return his $359,770 in profits.
While Special agreed to pay $2,956,496 to the SEC, he did not admit or deny the insider trading allegations. His energy firm, Special Energy Corporation started operations in the spring of 1979 in Fort Worth, Texas and eventually moved to Stillwater in 1990 to be near its core assets in the Mid-Continent.
The company website stated that it drilled several hundred vertical and horizontal wells in the Hunton reservoir over a ten year period starting in 1998. The company exited the play in 2009 through a sale to Eagle Energy Production LLC, then invested in more than 100,000 acres in central Kansas, only to sell it in 2011 to Chesapeake Energy.