A day after stepping down for “personal reasons” as CEOof Denver-based Van GilderInsurance Corp. (VGIC), Michael Van Gilder wasindicted on 5 counts of insider trading, according to U.S.Attorney John Walsh and the FBI.

An indictment was filed on Oct. 24. in the U.S. District Courtfor the District of Colorado. Concurrently, the U.S.Securities and Exchange Commission filed a complaint chargingVan Gilder with civil insider trading violations, conducted aparallel civil probe and substantially contributed to the criminalinvestigation of the case.

Van Gilder, 45, allegedly traded based on inside information in2007 and 2008 regarding Delta Petroleum Corp., based at the time inDenver.

In an Oct. 26 statement, VGIC President Don Woods saidthat ”Michael's personal legal challenges related to thecharges…have nothing to do with the company. The company is not asubject of the investigation and does not trade in securities. Wecontinue to focus on providing our clients the same level ofexceptional service we have offered for 107 years.”

The indictment alleges that Van Gilder made a series of tradesassociated with Denver-based Delta Petroleum Corp. afterreceiving confidential information from a Delta executive about aplanned investment in the company by Tracinda Corp., a privatelyheld Nevada corporation. The indictment claims Van Gilder was a“close personal friend” of the Delta execuitive, and that heprovided insurance policies for some of Delta's businessoperations.

Among the charges, the indictment alleges that Van Gilder hadcontacted his stockbroker to sell his investments in Delta after anarticle offered a negative assessment of company in advance of itsquarterly earnings report.

The indictment contends that after speaking with the Deltaexecutive and obtaining the confidential information about theTracinda investment, Van Gilder instead bought more stock andadvised others to do the same.

Former Community Banks CEO Donald Woods, who joined VGIC as president in August, takesover Michael Van Gilder's management responsibilities, with noimpact on the privately held company's “strategic direction oron its ability to serve customers,” according to the VGIC pressrelease.

According to the Denver Business Journal, Woods co-foundedGreenwood Village-based Community Banks of Colorado in 1991 andgrew it to more than $2 billion in assets and 42 branches inColorado and northern California. However, the banks failed lastNovember; Bank Midwest NA of Kansas City took over its deposits andbranches, and the Federal Deposit Insurance Corp. was appointedreceiver.

Van Gilder was named to the VGIC board of directors in 2000 andbecame CEO in May 2006, but he kept selling even while running thecompany. He was named the company's top salesperson fornew-business production each year between 1998 and 2008, and he hadthe highest overall sales portfolio in 2004.

Additional reporting by Phil Gusman