Clayton Peterson and his son Drew Peterson have plead guilty to a two count criminal information of securities fraud and conspiracy to commit securities fraud.
The senior Peterson was a board member of Mariner Energy and had inside information about a pending acquisition by Apache Energy.
Drew Peterson, an investment adviser purchased Mariner Energy in his sisters account without her knowledge. The younger Peterson also purchased Mariner for his investment club and retirement fund in the days prior to the deal. At the time Mariner was trading in the high teens.
Drew Peterson also shared the information with an unnamed friend who was CEO of a Denver based hedge fund. The hedge fund purchased shares and call options in Mariner and sold its entire position the day the acquisition was announced.
On April 15 Apache issued a press release that they would acquire Mariner at $26 dollars per share.
The SEC has also filed a parallel civil action against Clayton and Drew Peterson.
Steven Glaser, Clayton Peterson's attorney, had the following statement on behalf of his client " Clayton Peterson has accepted responsibility for his conduct in this matter, which was an aberration from his otherwise long and distinguished career. Mr. Peterson looks forward to putting this chapter of his life behind him."
Drew Peterson's attorney did not immediately respond to a CNBC inquiry.
Since US Attorney Preet Bharara has launched his investigation into Insider Trading 51 individuals have been charged and 48 have either been found or plead guilty.
FBI spokesman tells CNBC that the Insider Trading investigation is ongoing.
Clayton Peterson is scheduled to be sentenced on October 11 and Drew Peterson is scheduled to be sentenced on January 11.