MINNEAPOLIS (AP) — A former Minnesota oil industry executive who co-founded a facility that loaded North Dakota crude onto railcars has been convicted of an inventory manipulation scheme.
A federal jury in New York on Tuesday found Michael Reger guilty of securities fraud, concluding a lawsuit filed five years ago against Reger and Ryan Gilbertson, the other former co-owner of Wayzata-based Dakota Plains Holdings. Reger was acquitted of insider trading.
The lawsuit alleges that Reger and Gilbertson intentionally manipulated Dakota Plains’ stock price during its first 20 days of trading. Gilbertson was convicted in 2018 and sentenced to 12 years in prison for wire fraud, securities fraud and conspiracy to commit securities fraud.
Earlier this month, a federal judge gave preliminary approval to a $14 million settlement between Dakota Plains shareholders and several other directors and officers of the now-defunct company. Gilbertson has agreed to testify against Reger as part of his settlement, but he does not have to pay damages, the Star Tribune reported.
Reger said he “refused to settle because I think I did nothing wrong and didn’t harm the shareholders of the company. In fact, my family was the largest shareholder in the company even when it filed for bankruptcy.
U.S. District Court Judge Jed Rakoff will decide what damages Reger should pay shareholders. A third defendant in the case, Douglas Hoskins, was sentenced in 2018 to two years in prison for his role in the scheme.