SEC v. ROY N. COOK; JEFFREY A. NATROP; PETER S. RENNER; JAMES RUDOLPH; and PETER WILLIAMS, No. 2:24-cv-313, Eastern District of Wisconsin (Mar. 12, 2024) — Complaint

U.S. SECURITIES AND
EXCHANGE COMMISSION,

Plaintiff,

v.

ROY N. COOK, JEFFREY A. NATROP,
PETER S. RENNER, JAMES RUDOLPH
and PETER WILLIAMS,

  Defendants.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

Civil Case No. 2:24-cv-313

JURY TRIAL DEMANDED

COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) files this
Complaint against Roy N. Cook, Jeffrey A. Natrop, Peter S. Renner, James Rudolph and Peter
Williams (collectively, “Defendants”) and alleges as follows:
SUMMARY
1. This case concerns insider trading in the securities of Tallgrass Energy, LP
(“Tallgrass” or “the Company”). Roy Cook, through his position as a Tallgrass independent
director, obtained material nonpublic information in advance of two public announcements in
2019 concerning an offer by Blackstone Infrastructure Partners (“Blackstone”) to purchase all of
Tallgrass’s outstanding publicly traded shares it and its co-investors did not already own and
take the Company private. Cook knowingly or recklessly breached a duty he owed to Tallgrass
and its shareholders through a purchase of Tallgrass securities made in a securities account for a
family trust, and by tipping his friends Jeffrey Natrop, Peter Renner, James Rudolph and

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Peter Williams, who benefitted by purchasing Tallgrass securities in the weeks and days before
the announcements. Both public announcements caused the price of Tallgrass stock to increase
significantly.
2. On August 27, 2019, Tallgrass announced that Blackstone, which at the time held
a controlling interest in the general partner of Tallgrass, had made an offer to purchase all of the
outstanding public shares of Tallgrass at $19.50 per share (the “August Announcement”). After
three months of negotiations, Tallgrass and Blackstone announced on December 16, 2019, that
they had reached agreement on a final price of $22.45 per share (the “December
Announcement”). At the time of the announcements, Cook was an independent director on the
Tallgrass Board of Directors and also was the chair of Tallgrass’s Conflicts Committee, which
was tasked with assessing Blackstone’s initial offer and negotiating the final terms of the
transaction. By virtue of his positions, Cook learned material nonpublic information about the
Blackstone offer.
3. Natrop, Renner, Rudolph and Williams (the “ Tippees”) knew, or were reckless in
not knowing, that the information they received from Cook was material, nonpublic information
and that Cook disclosed the information in breach of his duty to Tallgrass and its shareholders.
On the basis of the material nonpublic information they received from Cook, the Tippees
purchased Tallgrass shares and/or call options in advance of the announcements, resulting in
illicit profits totaling approximately $613,000. Also, Cook knowingly or recklessly breached a
duty he owed to Tallgrass and its shareholders through a purchase of 20,000 shares of Tallgrass
in advance of the December Announcement in a family trust, resulting in profits of $88,800.
This trade w as based on material nonpublic information he learned in connection with his role in
ongoing negotiations with Blackstone in advance of the December Announcement. In addition,

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Cook failed to file the required forms with the Commission to publicly report this and other
2019 and 2020 transactions of Tallgrass stock in family trusts.
VIOLATIONS AND RELIEF SOUGHT
4. Through the conduct alleged in this Complaint, Defendants Cook, Natrop,
Renner, Rudolph and Williams violated, and unless restrained and enjoined will continue to
violate, Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
5. In addition, Defendant Cook violated Section 16(a) of the Exchange Act
[15 U.S.C. § 78p(a)] and Rule 16a-3 thereunder [17 C.F.R. § 240.16a-3].
6. The Commission seeks a permanent injunction against Defendants, enjoining
them from engaging in the transactions, acts, practices, and courses of business alleged in this
Complaint, civil penalties pursuant to Section 21A of the Exchange Act [15 U.S.C. § 78u-1], an
officer and director bar against Cook pursuant to Section 21(d)(2) of the Exchange Act
[15 U.S.C. § 78u(d)(2)], a civil penalty against Cook pursuant to Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)], and such other relief as the Court may deem just and
proper.
JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), 21A
and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(e), 78u-1, and 78aa]. In connection
with the conduct described herein, Defendants directly or indirectly made use of a means of
instrumentality of interstate commerce, or of the mails, or of a facility or a national securities
exchange.

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8. Venue in proper in this district pursuant to Section 27 of the Exchange Act
[15 U.S.C. § 78aa] because certain of the acts constituting the violations in this Complaint
occurred in this district, and the majority of the Defendants reside or resided in this district.
DEFENDANTS
9. Roy N. Cook, age 66, resides in Hartland, Wisconsin. At all relevant times, Cook
was an independent member of the Tallgrass Board of Directors and a member of the Tallgrass
Audit Committee. Cook asserted his Fifth Amendment right against self-incrimination and
refused to answer questions concerning the subject matter of this complaint during the SEC’s
investigation.
10. Jeffrey A. Natrop, age 73, resides in Wauwatosa, Wisconsin. At all relevant
times, Natrop was a principal of Renner Architects, LLC in Milwaukee, Wisconsin, and a friend
and business associate of Cook’s. Natrop asserted his Fifth Amendment right against self-
incrimination and refused to answer questions concerning the subject matter of this complaint
during the SEC’s investigation.
11. Peter S. Renner, age 73, resides in Cedarburg, Wisconsin. At all relevant times,
Renner was a principal of Renner Architects, LLC in Milwaukee, Wisconsin, and a friend and
business associate of Cook’s. Renner asserted his Fifth Amendment right against self-
incrimination and refused to answer questions concerning the subject matter of this complaint
during the SEC’s investigation.
12. James Rudolph, age 79, resides in Palm Beach Gardens, Florida. Rudolph is
retired and is a friend of Cook’s.
13. Peter Williams, age 56, resides in Pewaukee, Wisconsin. Williams, an
accountant, is a friend and business associate of Cook’s, and at all relevant times Williams acted
as Cook’s personal accountant. During all relevant times Williams also served as an agent for

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various trusts Cook had created in his name and in the names of his family members, and was an
authorized trader for many of Cook’s trust accounts. Williams asserted his Fifth Amendment
right against self-incrimination and refused to answer questions concerning the subject matter of
this complaint during the SEC’s investigation.
COMMONLY-USED TRADING TERMS
14. A “call option” is a type of contract that gives the owner the right, but not the
obligation, to buy 100 shares of the underlying security at a specified price within a specified
time. The “strike price” is the price per share at which the option owner can buy the underlying
security if he chooses to exercise the option. The “expiration date” is the last day that an option
contract is valid. If the option owner chooses not to exercise the option (in other words, not to
buy 100 shares of the underlying stock), the option expires and becomes worthless, and the
owner loses the money he paid to buy the option.
15. If the strike price of a call option is above the price at which the stock is trading,
the call option is “out-of-the-money” because the exercise of the option to purchase the stock at
the strike price and immediately sell the stock at a lower price would result in a trading loss. For
an “out-of-the-money” call option to be exercised profitably, the market price of the stock has to
rise above the strike price prior to the expiration of the option.
FACTS
Background of the Blackstone Take-Private Offer
16. Prior to April 2020, Tallgrass Energy, LP (“Tallgrass”) was a public company
whose Class A shares, representing limited partner interests, traded on the New York Stock
Exchange under the symbol “TGE.”

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17. Blackstone Infrastructure Partners (“Blackstone”), a private equity fund managed
by Blackstone, Inc., is located in New York, New York, and makes targeted investments across
all infrastructure sectors, including energy.
18. In March 2019, Blackstone, together with co-investors, purchased 44% of
Tallgrass’s outstanding public shares, and a controlling interest in the general partner of
Tallgrass. Thereafter, there was speculation in the media that Blackstone ultimately would seek
to purchase all public shares of Tallgrass and take the company private.
19. Throughout June and July 2019, Blackstone w as working with legal counsel and
outside economic advisors to analyze a potential take-private transaction and the price at which
to make an offer for Tallgrass’ outstanding shares. Blackstone initially contemplated making an
offer by August 5, 2019, but delayed its schedule while it continued collecting information,
including an updated financial forecast from Tallgrass management, similar to the forecast it had
received from Tallgrass management while it was evaluating its initial purchase of the
controlling interest.
Blackstone Prepares to Make a Take-Private Offer
20. On July 29, 2019, two Blackstone employees who served as Tallgrass directors
and were involved in Blackstone’s analysis of the potential take-private transaction reached out
to Tallgrass’s Chief Financial Officer and asked for Tallgrass management’s long-term forecast.
The CFO discussed the request with Tallgrass’s Chief Executive Officer and its General
Counsel. Tallgrass management viewed the July 29, 2019 request as an indicator that Blackstone
likely was actively considering making the take-private offer. Tallgrass insiders considered this
request for information from Blackstone to be confidential inside information.
21. At that time, and until the closing of the take-private transaction in April 2020,
Roy Cook was an independent member of Tallgrass’s Board of Directors. Cook attended Board

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meetings and was in regular communication with several of Tallgrass’s executives, as well as his
fellow board members. Cook also chaired previously constituted Conflicts Committees of the
Tallgrass board. These Conflicts Committees, comprised of independent board members,
generally were formed to represent the interests of Tallgrass shareholders in evaluating potential
related-party transactions or transactions between parties with common ownership, to guard
against potential conflicts of interest. Cook later chaired the Conflicts Committee formed to
evaluate the Blackstone take-private offer.
22. On Tuesday, July 30, 2019, the day after Tallgrass management received the
request for management’s long-term forecast from the Blackstone directors on Tallgrass’s
Board, Cook spoke via telephone with Tallgrass’s CEO and had a separate phone call with a
fellow independent Tallgrass board member. On July 31, 2019, Cook again spoke with the CEO
and on August 1, 2019, Cook exchanged text messages with another of Tallgrass’s independent
board members. Cook was on vacation the week of August 2, 2019, but was in contact with one
of the other independent board members. Tallgrass management provided the Blackstone
directors with a draft of the requested long-term forecast on August 6, 2019. Blackstone
incorporated the forecast into its financial models analyzing the potential take-private
transaction and discussed it with its financial advisors later that month.
23. On the morning of Friday August 9, 2019, Cook had telephone calls with
Tallgrass’s CEO and its General Counsel, including a discussion with the General Counsel
regarding whether he was at that time permitted to trade Tallgrass securities. Shortly after the
call with the General Counsel, Cook texted a fellow independent board member and told him
that the General Counsel informed him that they were not permitted to purchase Tallgrass
securities because they were still in a “blackout” period. The next day, when the fellow

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independent board member asked Cook via text why they were still in a blackout period, Cook
replied “BIP,” which was shorthand for Blackstone.
24. On August 14, 2019, nearly two weeks before the public announcement of the
take-private offer, Cook reached out to a law firm and an advisory firm to inquire about their
ability to provide guidance in the event of a potential transaction involving Blackstone. Both
firms had served as advisors to previous Tallgrass Conflicts Committees chaired by Cook.
25. On August 27, 2019, Tallgrass announced via a press release that Blackstone was
offering to acquire all of the outstanding public shares of TGE for $19.50 per share. The price of
Tallgrass stock rose 36% the next day, closing at $19.46 per share.
26. The next day, at a special Tallgrass board meeting, a Conflicts Committee was
formed to analyze the offer. Cook was appointed to chair the committee. The committee retained
the law firm and financial adviser Cook had previously spoken to in mid-August about a
potential transaction involving Tallgrass.
Cook Tipped Friends and Associates in Advance of the August Announcement
27. Between July 30, 2019, when, upon information and belief, Cook learned that
Blackstone was considering making a take-private offer, and the August Announcement, Cook
communicated material nonpublic information to the Tippees, who traded based on that
information.
28. When Cook conveyed this information, he breached his duty to Tallgrass to keep
the information confidential. Cook knew, or was reckless in not knowing, that the information
he conveyed to the Tippees, including material nonpublic information, was disclosed in breach
of his duty to Tallgrass, and that the Tippees would use the information for trading.
29. Cook received a personal benefit from his tip of material nonpublic information
to Tippees, including the benefit of providing a gift of information to his close friends.

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Renner and Natrop
30. At all relevant times, Cook was friends and business associates with Renner and
Natrop. Cook and Renner have been friends for about fifteen years and would meet frequently to
discuss both oil and gas investments (Cook’s expertise) and real estate investments (Renner’s
expertise). Renner and Natrop knew that Cook was a member of Tallgrass’s Board of Directors.
Since at least 2010, Cook has served as a trustee for trusts for the benefit of Renner’s children.
In July 2019 Renner attended a wedding reception for Cook’s daughter. In the summer of 2019
Cook was engaged in a business venture with Renner and Natrop to build a condominium
development in Oconomowoc, Wisconsin. The three exchanged emails and met in person on a
regular basis.
31. On July 31, August 1, August 6, August 7, 2019, August 8, and August 9, 2019,
there were telephone calls between Cook and the main phone line for Renner Architects, the
firm owned by Renner and Natrop. During the course of one of these conversations or other
conversations around this time, Cook, upon information and belief, tipped Renner and/or Natrop
material nonpublic information about Tallgrass, specifically that Blackstone was considering
making a take-private offer.
32. Based on the material nonpublic information from Cook, on August 8, 2019,
Renner purchased 200 out-of-the-money Tallgrass call options (representing the right to
purchase 20,000 Tallgrass shares) with a strike price of $20 per share and an expiration date of
October 18, 2019. Tallgrass common stock closed that day at $17.20 per share. In addition, on
August 9, 2019, again based on material nonpublic information from Cook, Renner purchased
100 out-of-the-money Tallgrass call options with a strike price of $18 per share and an
expiration date of January 17, 2020. Tallgrass common stock closed that day at $17.35 per share.
Renner’s trades resulted in illicit profits of $13,520.

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33. At the time he purchased these securities, Renner knew, or was reckless in not
knowing, that the information from Cook was material nonpublic information, and that Cook
disclosed this information in breach of Cook’s duty to Tallgrass.
34. Renner had previously traded Tallgrass common stock but had never before
purchased stock options.
35. Based on material nonpublic information from Cook, on August 9, 2019, Natrop
purchased 482 out-of-the-money Tallgrass call options, with a strike price of $18 per share and
an expiration date of January 17, 2020. Tallgrass common stock closed that day at $17.35 per
share. Natrop’s trades resulted in illicit profits of $43,862.
36. At the time he purchased these securities, Natrop knew, or was reckless in not
knowing, that the information from Cook was material nonpublic information, and that Cook
disclosed this information in breach of Cook’s duty to Tallgrass.
37. Natrop’s purchase of Tallgrass call options was both the first time he had
purchased call options since 2017, and also his largest purchase of any type of option since
2017.
Rudolph
38. At all relevant times, Cook and Rudolph were friends and were in regular
communication. Though they lived in different states, they would meet in person approximately
three or four times a year and spoke on the phone at least once a week, including conversations
about investments. Rudolph knew that Cook was a member of Tallgrass’s Board of Directors.
39. To celebrate his birthday, Rudolph invited Cook to join him on his yacht in the
Bahamas for a week-long sailing trip in August 2019. Rudolph and Cook spent the week of
August 2, 2019, on Rudolph’s yacht, visiting several different ports in the Bahamas. While on
the trip together, Cook, upon information and belief, tipped Rudolph material nonpublic

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information about Tallgrass, specifically that Blackstone was considering making a take-private
offer.
40. On August 6, 2019, while the yacht was docked at a resort on Chubb Cay,
Rudolph purchased 15,000 shares of Tallgrass common stock at $17.39 per share, based the
material nonpublic information he had learned from Cook, resulting in illicit profits of $31,035.
41. At the time he purchased these securities, Rudolph knew, or was reckless in not
knowing, that the information Cook conveyed to him was material nonpublic information, and
that Cook disclosed this information in breach of Cook’s duty to Tallgrass.
42. This trade was the first time Rudolph had ever purchased Tallgrass securities.
Williams
43. At all relevant times, Williams and Cook were friends and business associates.
The two became friends when Williams worked for two companies owned by Cook. Williams
subsequently became Cook’s personal accountant. Williams acted as an agent for several of
Cook’s family trusts, directing trading in securities accounts held by the trusts. They regularly
spoke on the telephone and communicated via text message. Williams knew that Cook was a
member of Tallgrass’s Board of Directors.
44. Williams and Cook spoke on the telephone on August 14, 2019, shortly after
Cook’s telephone calls with the law firm and economic advisor that were subsequently retained
by the Conflicts Committee after the Blackstone take-private offer was announced on August 27.
45. Both Cook and Williams were in Cook’s hometown of Hartland, Wisconsin,
early in the evening on Sunday August 18, 2019. The population of Hartland is approximately
9,500.

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46. Between August 14 and 18, 2019, Cook, upon information and belief, tipped
Williams material nonpublic information about Tallgrass, specifically that Blackstone was
considering making a take-private offer.
47. Based on the material nonpublic information he received from Cook, on
August 19, 2019, Williams purchased 166 out-of-the-money call options: 151 with a strike price
of $19 per share and an expiration date of October 18, 2019, and another 15 with a strike price
of $18 per share and an expiration date of September 20, 2019. Tallgrass common stock closed
that day at $15.94 per share.
48. Williams purchased additional Tallgrass securities on August 21, 2019, based on
the material nonpublic information he learned from Cook. On that day, Williams purchased
4,134 out-of-the-money call options: 1,849 with a strike price of $19 per share and an expiration
date of October 18, 2019; 1,985 with a strike price of $18 per share and an expiration date of
September 20, 2019; and 300 with a strike price of $20 per share and an expiration date of
September 20, 2019. Tallgrass common stock closed that day at $15.70 per share.
49. Williams’s trades resulted in illicit profits of $463,000.
50. At the time he purchased these securities, Williams knew, or was reckless in not
knowing, that the information Cook conveyed to him was material nonpublic information, and
that Cook disclosed this information in breach of Cook’s duty to Tallgrass.
51. Prior to these trades, Williams had never purchased options of any issuer.
Negotiations with Blackstone Continue after the August
Announcement
52. As chair of the Conflicts Committee, Cook led negotiations with Blackstone after
the August Announcement. Throughout September, October, November, and December 2019,
the Conflicts Committee met regularly and was in frequent communication with its advisors.

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53. On October 22, 2019, the Conflicts Committee determined that the $19.50 per
share initial price offered by Blackstone was inadequate. A few days later Blackstone increased
its offer to $20 per share, which the Conflicts Committee rejected on October 30. On December
10, 2019, the Conflicts Committee reviewed an announcement to be made in the event the
parties were unable to reach an agreement. Later that day, with the transaction in doubt, the
Conflicts Committee made a counter-offer to Blackstone of $23 per share. On December 11,
2019, Blackstone responded with its final offer, at $22.45 per share, bringing the deal much
closer to reality. It informed the Conflicts Committee that the offer would be valid until 5:00 pm
on December 13, 2019. On December 13, 2019, at 3:39 pm, the Conflicts Committee informed
Blackstone that it would accept the $22.45 per share offer and recommend that Tallgrass
shareholders approve the transaction.
54. On December 16, 2019, Blackstone and TGE publicly announced that they had
entered into a definitive merger agreement, pursuant to which Blackstone would purchase the
outstanding shares of TGE for $22.45 per share. Following this news, on December 17, 2019,
the price of TGE stock rose 21% to close at $22.14 per share. After a Tallgrass shareholder vote,
the take-private transaction closed in April 2020.
The Cook And Williams Trades in Advance of the December Announcement
55. Between December 1, 2019, and the December Announcement, Cook, upon
information and belief, communicated material nonpublic information to Williams, who traded
based on that information in his personal account and in a Cook family trust. Cook knew, or was
reckless in not knowing, that trading on the basis of material nonpublic information breached his
duty to Tallgrass. Cook also knew, or was reckless in not knowing, that the information he
conveyed to Williams was disclosed in breach of his duty to Tallgrass, and that Williams would
use the information for trading. Cook received a personal benefit from his tip of material

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nonpublic information to Williams, including the benefit of providing a gift of information to his
close friend.
56. On December 1, 2019, Cook had a call with a Blackstone representative.
Immediately afterward, Cook had a telephone call with one of the Conflicts Committee
members. On December 2, 2019, Cook had a telephone call with the other Conflicts Committee
member.
57. On D ecember 3, 2019, Williams and Cook had a telephone call and exchanged
several text messages. During one of those communications, upon information and belief, Cook
updated Williams on the status of negotiations between Tallgrass and Blackstone.
58. Following those communications, on December 3, 2019, Williams purchased
20,000 shares of Tallgrass at $17.70 per share in an account held by a trust called the RNC 2017
Grat Trust (Cook’s initials are RNC). Cook was the settlor of the RNC 2017 Grat Trust, which
named his children as beneficiaries, and had received annuity payments from the trust. Williams
had trading authority for the trust’s securities account. The trust held the stock through the
closing of the take-private transaction in April 2020. The December 3 trade resulted in profits of
$88,800. Cook knowingly or recklessly breached a duty he owed to Tallgrass and its
shareholders through this purchase.
59. On the morning of December 9, 2019, when it appeared to members of the
Conflicts Committee that a deal might not be reached, Cook had two telephone calls with
Williams. Later that day, Williams placed two bearish trades in Tallgrass securities in his
personal account: he sold 50 previously purchased call options with a strike price of $18 per
share and 91 previously purchased call options with a strike price of $19 per share, all with an
expiration date of December 20, 2019. The price of Tallgrass common stock closed that day at
$18.39 per share.

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60. Cook left Wisconsin for a vacation in Chile on December 9, 2019. While in
Miami on a layover that evening, he had telephone calls with an outside advisor for the Conflicts
Committee, and with each of his fellow Conflicts Committee members. The Conflicts
Committee met telephonically the morning of December 10 and discussed the possibility that the
deal might not close.
61. On the morning of December 10, Williams placed bearish limit orders to sell
160,000 shares of Tallgrass stock across four of the Cook family trusts. On the afternoon of
December 10, 2019, while in Chile, Cook had a three-minute telephone call with Williams.
Upon information and belief, during the conversation Cook provided Williams with material
nonpublic information regarding the status of negotiations.
62. On the morning of December 12, 2019, after Blackstone had significantly
increased its offer, Williams cancelled the unfilled remainder of his previously ordered Tallgrass
sales.
63. On December 13, 2019, Williams again began bullish purchases of Tallgrass
securities. He purchased 200 out-of-the-money Tallgrass call options in his personal account:
100 call options with a strike price of $20 per share and an expiration date of December 20,
2019, and another 100 call options with a strike price of $20 per share and an expiration date of
January 17, 2020. Williams and Cook exchanged two text messages later that day. The Conflicts
Committee also informed Blackstone that it would accept the $22.45 per share offer at 3:59 pm
on December 13, 2019. The stock closed at $18.38 per share that day.
64. On the morning of December 16, 2019, Williams bought another 110 call options
in his personal account: 100 call options with a strike price of $19 per share and an expiration
date of January 17, 2020, and another 10 call options with a strike price of $20 per share and an
expiration date of January 17, 2020.

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65. When Williams purchased Tallgrass securities in December 2019, he knew, or
was reckless in not knowing, that the information Cook conveyed to him was material nonpublic
information, and that Cook disclosed this information in breach of Cook’s duty to Tallgrass.
66. On December 17, 2019, after the previous night’s announcement of the agreed-
upon price for the take-private transaction, Williams closed out his Tallgrass options positions
that he had opened in December 2019. Williams’s trades resulted in profits of $61,525.
Cook was Aware of Tallgrass’s Prohibitions Against Insider Trading and
His Duty to Keep Nonpublic Information Confidential
67. At all relevant times, Tallgrass had an Insider Trading Policy that prohibited
Tallgrass officers, directors, and employees of Tallgrass from purchasing or selling securities
while in the possession of material, nonpublic information, and from tipping “material nonpublic
information to anyone who may trade while in possession of such information.” The policy also
prohibited Company insiders from communicating material nonpublic information about
Tallgrass to “anyone outside the Company, or to anyone within the Company other than on a
need-to-know basis.” All Tallgrass officers, directors and employees were required to “review
and comply” with the Policy.
68. The Tallgrass Board of Directors, including Cook, was responsible for reviewing
and approving the Insider Trading Policy, and would review it periodically.
69. The Company also instituted regular “blackout” periods, during which all
officers, directors, and employees were prohibited from trading Tallgrass stock. Blackout
periods typically started at the end of each quarter and ended one or two days after the public
release of earnings information for that quarter. In addition, the Company’s Insider Trading
Policy provided that a smaller group of individuals at Tallgrass—which included executives and

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Board members—were not permitted to trade in Tallgrass securities at any time without consent
from the Company’s general counsel.
Cook Failed to File Required Forms in Connection with Certain
Purchases and Sales of TGE Securities in Family Trusts
70. At all relevant times, Cook was a director of Tallgrass, which had stock
registered under Section 12 of the Exchange Act. As such, Cook was required to report to the
SEC changes in beneficial ownership of his Tallgrass shares, such as through purchases, sales,
or gifts, within two business days, in an SEC Form 4, and within 45 days of the end of
Tallgrass’s fiscal years in an SEC Form 5, unless the transactions were previously reported.
71. The purpose of Forms 4 and 5 is to provide the investing public with reliable
information about company insiders’ various transactions in company securities, including the
date of such transactions, the amount of securities purchased or sold, and the price per share.
72. Cook failed to file Forms 4 or 5 to disclose numerous purchases and sales of
Tallgrass stock in 2019 and 2020 by family trusts for which he had a reporting obligation.
73. Specifically, Cook failed to report the following transactions:
Trust Date Transaction Quantity
RNC 2004 Irrev
Trust
6/26/19 Purchase 25,000
12/10/19 Sale 14,919
12/12/19 Sale 800
2/28/20 Sale 2,553
3/17/20 Purchase 3,000
RNC 2011
Irrevocable Trust
6/26/19 Purchase 25,000
12/10/19 Sale 11,180
12/11/19 Sale 38,820
RMC Irrevocable
Trust of 2014
12/10/19 Sale 8,441
12/11/19 Sale 14,324
2/28/20 Sale 35,114
3/17/20 Purchase 45,000
RNC 2014 GRAT 11/25/19 Sale 40,000
RNC 2017 GRAT 12/3/19 Purchase  20,000
TMC 2014 GRAT 11/25/19 Sale 40,000

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FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(All Defendants)
74. The Commission re-alleges and incorporates by reference each and every
allegation contained in the paragraphs above.
75. All of the Tallgrass shares and call options Defendants purchased are securities.
76. Cook learned material, nonpublic information about a potential Blackstone take-
private offer as a result of his position as an independent director of the Tallgrass Board. Cook
also learned material nonpublic information about the negotiations between Tallgrass and
Blackstone as Chair of the Tallgrass Conflicts Committee. Cook owed a fiduciary or similar
duty of trust and confidence to Tallgrass and its shareholders to keep the information
confidential and refrain from trading in Tallgrass securities or tipping the information to others.
Cook knowingly or recklessly breached that duty through a purchase of Tallgrass securities. In
breach of that duty, Cook also communicated material, nonpublic information to the Tippees,
knowing, or recklessly disregarding, that they would use the information in connection with
securities trading. Cook communicated material, nonpublic information to the Tippees in
exchange for a personal benefit or with the expectation of receiving a benefit.
77. The Tippees purchased Tallgrass securities on the basis of material nonpublic
information they learned from Cook, who had obtained the information as a result of his position
as an independent director of the Tallgrass Board and Chair of the Tallgrass Conflicts
Committee. The Tippees purchased Tallgrass securities knowing, or being reckless in not
knowing, that the information they received from Cook was material and nonpublic, and that by
conveying this information to them, Cook had breached his duty to Tallgrass to keep the
information confidential.

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78. By engaging in the conduct described above, Defendants, directly or indirectly, in
connection with the purchase or sale of securities, by use of means or instrumentalities of
interstate commerce, or of the mails, with scienter: (a) employed devices, schemes or artifices to
defraud; (b) made untrue statements of material facts or omitted to state material facts necessary
in order to make the statements made, in the light of the circumstances under which they were
made, not misleading; and (c) engaged in acts, practices, or courses of business which operated
or would operate as a fraud or deceit upon other persons, including purchasers and sellers of
securities.
79. By reason of the foregoing, Defendants, directly or indirectly, violated, and,
unless enjoined, are reasonably likely to continue to violate, Exchange Act Section 10(b)
[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 16(a) and Rule 16a-13 Thereunder
(Cook)
80. The Commission re-alleges and incorporates by reference each and every
allegation contained in the paragraphs above.
81. Cook, as an officer or director of an issuer with a class of equity securities
registered pursuant to Exchange Act Section 12 [15 U.S.C. § 78l], failed to timely and
accurately file Forms 4 and Forms 5 with the Commission containing the information required
therein.
82. By reason of the foregoing, Cook violated and, unless enjoined, will again violate
Exchange Act Section 16(a) [15 U.S.C. § 78p(a)] and Rule 16a-3 [17 C.F.R. § 240.16a-3]
thereunder.

20

PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a final judgment:
Permanently restraining and enjoining Defendants from, directly or indirectly, violating
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b) and Rule 10b-5 thereunder [17 C.F.R.
§ 240.10b-5];
Ordering Defendants to pay civil monetary penalties pursuant to Section 21A of the
Exchange Act [15 U.S.C. § 78u(d)(2)] and, as to Cook, Section 21(d)(3) of the Exchange Act
[15 U.S.C. § 78u(d)(3)];
Ordering Defendants to disgorge all ill-gotten gains by which they were unjustly enriched,
with prejudgment interest thereon, as a result of the alleged violations pursuant to Exchange Act
Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7);
Imposing an officer and director bar against Cook pursuant to Section 21(d)(2) of the
Exchange Act [15 U.S.C. § 78u(d)(2)]; and
Granting any other and further relief this Court may deem just and proper.

21

DEMAND FOR JURY TRIAL
Pursuant to Rule 38 of the Federal Rules of Civil Procedures, the Commission demands
trial by jury in this action of all issues so triable.
Date: March 12, 2024
Respectfully submitted,
s/ Dean M. Conway
Dean M. Conway
D.C. Bar No. 457433
100 F Street, N.E.
Washington, DC 20549
Phone: (202) 551-4412
   Email: [email protected]

Attorneys for Plaintiff
U.S. SECURITIES AND EXCHANGE
COMMISSION

Of Counsel
Brian Quinn
Brian Vann
David Frisof

U.S. SECURITIES AND 
EXCHANGE COMMISSION, 

 
Plaintiff, 

 
v. 

 
ROY N. COOK, JEFFREY A. NATROP, 
PETER S. RENNER, JAMES RUDOLPH 
and PETER WILLIAMS, 
 
  Defendants. 
 

 
 

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF WISCONSIN 

 

 

 

Civil Case No. 2:24-cv-313 
 
JURY TRIAL DEMANDED 

 
 

 

 
 
 
 
 

COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) files this 

Complaint against Roy N. Cook, Jeffrey A. Natrop, Peter S. Renner, James Rudolph and Peter 

Williams (collectively, “Defendants”) and alleges as follows: 

SUMMARY 

1. This case concerns insider trading in the securities of Tallgrass Energy, LP 

(“Tallgrass” or “the Company”). Roy Cook, through his position as a Tallgrass independent 

director, obtained material nonpublic information in advance of two public announcements in 

2019 concerning an offer by Blackstone Infrastructure Partners (“Blackstone”) to purchase all of 

Tallgrass’s outstanding publicly traded shares it and its co-investors did not already own and 

take the Company private. Cook knowingly or recklessly breached a duty he owed to Tallgrass 

and its shareholders through a purchase of Tallgrass securities made in a securities account for a 

family trust, and by tipping his friends Jeffrey Natrop, Peter Renner, James Rudolph and 

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Peter Williams, who benefitted by purchasing Tallgrass securities in the weeks and days before 

the announcements. Both public announcements caused the price of Tallgrass stock to increase 

significantly. 

2. On August 27, 2019, Tallgrass announced that Blackstone, which at the time held 

a controlling interest in the general partner of Tallgrass, had made an offer to purchase all of the 

outstanding public shares of Tallgrass at $19.50 per share (the “August Announcement”). After 

three months of negotiations, Tallgrass and Blackstone announced on December 16, 2019, that 

they had reached agreement on a final price of $22.45 per share (the “December 

Announcement”). At the time of the announcements, Cook was an independent director on the 

Tallgrass Board of Directors and also was the chair of Tallgrass’s Conflicts Committee, which 

was tasked with assessing Blackstone’s initial offer and negotiating the final terms of the 

transaction. By virtue of his positions, Cook learned material nonpublic information about the 

Blackstone offer. 

3. Natrop, Renner, Rudolph and Williams (the “Tippees”) knew, or were reckless in 

not knowing, that the information they received from Cook was material, nonpublic information 

and that Cook disclosed the information in breach of his duty to Tallgrass and its shareholders. 

On the basis of the material nonpublic information they received from Cook, the Tippees 

purchased Tallgrass shares and/or call options in advance of the announcements, resulting in 

illicit profits totaling approximately $613,000. Also, Cook knowingly or recklessly breached a 

duty he owed to Tallgrass and its shareholders through a purchase of 20,000 shares of Tallgrass 

in advance of the December Announcement in a family trust, resulting in profits of $88,800. 

This trade was based on material nonpublic information he learned in connection with his role in 

ongoing negotiations with Blackstone in advance of the December Announcement. In addition, 

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Cook failed to file the required forms with the Commission to publicly report this and other 

2019 and 2020 transactions of Tallgrass stock in family trusts. 

VIOLATIONS AND RELIEF SOUGHT 

4. Through the conduct alleged in this Complaint, Defendants Cook, Natrop, 

Renner, Rudolph and Williams violated, and unless restrained and enjoined will continue to 

violate, Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

5. In addition, Defendant Cook violated Section 16(a) of the Exchange Act 

[15 U.S.C. § 78p(a)] and Rule 16a-3 thereunder [17 C.F.R. § 240.16a-3]. 

6. The Commission seeks a permanent injunction against Defendants, enjoining 

them from engaging in the transactions, acts, practices, and courses of business alleged in this 

Complaint, civil penalties pursuant to Section 21A of the Exchange Act [15 U.S.C. § 78u-1], an 

officer and director bar against Cook pursuant to Section 21(d)(2) of the Exchange Act 

[15 U.S.C. § 78u(d)(2)], a civil penalty against Cook pursuant to Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)], and such other relief as the Court may deem just and 

proper. 

JURISDICTION AND VENUE 

7. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), 21A 

and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(e), 78u-1, and 78aa]. In connection 

with the conduct described herein, Defendants directly or indirectly made use of a means of 

instrumentality of interstate commerce, or of the mails, or of a facility or a national securities 

exchange. 

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8. Venue in proper in this district pursuant to Section 27 of the Exchange Act 

[15 U.S.C. § 78aa] because certain of the acts constituting the violations in this Complaint 

occurred in this district, and the majority of the Defendants reside or resided in this district.  

DEFENDANTS 

9. Roy N. Cook, age 66, resides in Hartland, Wisconsin. At all relevant times, Cook 

was an independent member of the Tallgrass Board of Directors and a member of the Tallgrass 

Audit Committee. Cook asserted his Fifth Amendment right against self-incrimination and 

refused to answer questions concerning the subject matter of this complaint during the SEC’s 

investigation. 

10. Jeffrey A. Natrop, age 73, resides in Wauwatosa, Wisconsin. At all relevant 

times, Natrop was a principal of Renner Architects, LLC in Milwaukee, Wisconsin, and a friend 

and business associate of Cook’s. Natrop asserted his Fifth Amendment right against self-

incrimination and refused to answer questions concerning the subject matter of this complaint 

during the SEC’s investigation. 

11. Peter S. Renner, age 73, resides in Cedarburg, Wisconsin. At all relevant times, 

Renner was a principal of Renner Architects, LLC in Milwaukee, Wisconsin, and a friend and 

business associate of Cook’s. Renner asserted his Fifth Amendment right against self-

incrimination and refused to answer questions concerning the subject matter of this complaint 

during the SEC’s investigation. 

12. James Rudolph, age 79, resides in Palm Beach Gardens, Florida. Rudolph is 

retired and is a friend of Cook’s. 

13. Peter Williams, age 56, resides in Pewaukee, Wisconsin. Williams, an 

accountant, is a friend and business associate of Cook’s, and at all relevant times Williams acted 

as Cook’s personal accountant. During all relevant times Williams also served as an agent for 

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various trusts Cook had created in his name and in the names of his family members, and was an 

authorized trader for many of Cook’s trust accounts. Williams asserted his Fifth Amendment 

right against self-incrimination and refused to answer questions concerning the subject matter of 

this complaint during the SEC’s investigation. 

COMMONLY-USED TRADING TERMS 

14. A “call option” is a type of contract that gives the owner the right, but not the 

obligation, to buy 100 shares of the underlying security at a specified price within a specified 

time. The “strike price” is the price per share at which the option owner can buy the underlying 

security if he chooses to exercise the option. The “expiration date” is the last day that an option 

contract is valid. If the option owner chooses not to exercise the option (in other words, not to 

buy 100 shares of the underlying stock), the option expires and becomes worthless, and the 

owner loses the money he paid to buy the option. 

15. If the strike price of a call option is above the price at which the stock is trading, 

the call option is “out-of-the-money” because the exercise of the option to purchase the stock at 

the strike price and immediately sell the stock at a lower price would result in a trading loss. For 

an “out-of-the-money” call option to be exercised profitably, the market price of the stock has to 

rise above the strike price prior to the expiration of the option.  

FACTS 

Background of the Blackstone Take-Private Offer 

16. Prior to April 2020, Tallgrass Energy, LP (“Tallgrass”) was a public company 

whose Class A shares, representing limited partner interests, traded on the New York Stock 

Exchange under the symbol “TGE.” 

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17. Blackstone Infrastructure Partners (“Blackstone”), a private equity fund managed 

by Blackstone, Inc., is located in New York, New York, and makes targeted investments across 

all infrastructure sectors, including energy. 

18. In March 2019, Blackstone, together with co-investors, purchased 44% of 

Tallgrass’s outstanding public shares, and a controlling interest in the general partner of 

Tallgrass. Thereafter, there was speculation in the media that Blackstone ultimately would seek 

to purchase all public shares of Tallgrass and take the company private. 

19. Throughout June and July 2019, Blackstone was working with legal counsel and 

outside economic advisors to analyze a potential take-private transaction and the price at which 

to make an offer for Tallgrass’ outstanding shares. Blackstone initially contemplated making an 

offer by August 5, 2019, but delayed its schedule while it continued collecting information, 

including an updated financial forecast from Tallgrass management, similar to the forecast it had 

received from Tallgrass management while it was evaluating its initial purchase of the 

controlling interest. 

Blackstone Prepares to Make a Take-Private Offer 

20. On July 29, 2019, two Blackstone employees who served as Tallgrass directors 

and were involved in Blackstone’s analysis of the potential take-private transaction reached out 

to Tallgrass’s Chief Financial Officer and asked for Tallgrass management’s long-term forecast. 

The CFO discussed the request with Tallgrass’s Chief Executive Officer and its General 

Counsel. Tallgrass management viewed the July 29, 2019 request as an indicator that Blackstone 

likely was actively considering making the take-private offer. Tallgrass insiders considered this 

request for information from Blackstone to be confidential inside information. 

21. At that time, and until the closing of the take-private transaction in April 2020, 

Roy Cook was an independent member of Tallgrass’s Board of Directors. Cook attended Board 

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meetings and was in regular communication with several of Tallgrass’s executives, as well as his 

fellow board members. Cook also chaired previously constituted Conflicts Committees of the 

Tallgrass board. These Conflicts Committees, comprised of independent board members, 

generally were formed to represent the interests of Tallgrass shareholders in evaluating potential 

related-party transactions or transactions between parties with common ownership, to guard 

against potential conflicts of interest. Cook later chaired the Conflicts Committee formed to 

evaluate the Blackstone take-private offer.  

22. On Tuesday, July 30, 2019, the day after Tallgrass management received the 

request for management’s long-term forecast from the Blackstone directors on Tallgrass’s 

Board, Cook spoke via telephone with Tallgrass’s CEO and had a separate phone call with a 

fellow independent Tallgrass board member. On July 31, 2019, Cook again spoke with the CEO 

and on August 1, 2019, Cook exchanged text messages with another of Tallgrass’s independent 

board members. Cook was on vacation the week of August 2, 2019, but was in contact with one 

of the other independent board members. Tallgrass management provided the Blackstone 

directors with a draft of the requested long-term forecast on August 6, 2019. Blackstone 

incorporated the forecast into its financial models analyzing the potential take-private 

transaction and discussed it with its financial advisors later that month. 

23. On the morning of Friday August 9, 2019, Cook had telephone calls with 

Tallgrass’s CEO and its General Counsel, including a discussion with the General Counsel 

regarding whether he was at that time permitted to trade Tallgrass securities. Shortly after the 

call with the General Counsel, Cook texted a fellow independent board member and told him 

that the General Counsel informed him that they were not permitted to purchase Tallgrass 

securities because they were still in a “blackout” period. The next day, when the fellow 

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independent board member asked Cook via text why they were still in a blackout period, Cook 

replied “BIP,” which was shorthand for Blackstone.  

24. On August 14, 2019, nearly two weeks before the public announcement of the 

take-private offer, Cook reached out to a law firm and an advisory firm to inquire about their 

ability to provide guidance in the event of a potential transaction involving Blackstone. Both 

firms had served as advisors to previous Tallgrass Conflicts Committees chaired by Cook. 

25. On August 27, 2019, Tallgrass announced via a press release that Blackstone was 

offering to acquire all of the outstanding public shares of TGE for $19.50 per share. The price of 

Tallgrass stock rose 36% the next day, closing at $19.46 per share. 

26. The next day, at a special Tallgrass board meeting, a Conflicts Committee was 

formed to analyze the offer. Cook was appointed to chair the committee. The committee retained 

the law firm and financial adviser Cook had previously spoken to in mid-August about a 

potential transaction involving Tallgrass. 

Cook Tipped Friends and Associates in Advance of the August Announcement 

27. Between July 30, 2019, when, upon information and belief, Cook learned that 

Blackstone was considering making a take-private offer, and the August Announcement, Cook 

communicated material nonpublic information to the Tippees, who traded based on that 

information. 

28. When Cook conveyed this information, he breached his duty to Tallgrass to keep 

the information confidential. Cook knew, or was reckless in not knowing, that the information 

he conveyed to the Tippees, including material nonpublic information, was disclosed in breach 

of his duty to Tallgrass, and that the Tippees would use the information for trading. 

29. Cook received a personal benefit from his tip of material nonpublic information 

to Tippees, including the benefit of providing a gift of information to his close friends. 

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Renner and Natrop 

30. At all relevant times, Cook was friends and business associates with Renner and 

Natrop. Cook and Renner have been friends for about fifteen years and would meet frequently to 

discuss both oil and gas investments (Cook’s expertise) and real estate investments (Renner’s 

expertise). Renner and Natrop knew that Cook was a member of Tallgrass’s Board of Directors. 

Since at least 2010, Cook has served as a trustee for trusts for the benefit of Renner’s children. 

In July 2019 Renner attended a wedding reception for Cook’s daughter. In the summer of 2019 

Cook was engaged in a business venture with Renner and Natrop to build a condominium 

development in Oconomowoc, Wisconsin. The three exchanged emails and met in person on a 

regular basis. 

31. On July 31, August 1, August 6, August 7, 2019, August 8, and August 9, 2019, 

there were telephone calls between Cook and the main phone line for Renner Architects, the 

firm owned by Renner and Natrop. During the course of one of these conversations or other 

conversations around this time, Cook, upon information and belief, tipped Renner and/or Natrop 

material nonpublic information about Tallgrass, specifically that Blackstone was considering 

making a take-private offer. 

32. Based on the material nonpublic information from Cook, on August 8, 2019, 

Renner purchased 200 out-of-the-money Tallgrass call options (representing the right to 

purchase 20,000 Tallgrass shares) with a strike price of $20 per share and an expiration date of 

October 18, 2019. Tallgrass common stock closed that day at $17.20 per share. In addition, on 

August 9, 2019, again based on material nonpublic information from Cook, Renner purchased 

100 out-of-the-money Tallgrass call options with a strike price of $18 per share and an 

expiration date of January 17, 2020. Tallgrass common stock closed that day at $17.35 per share. 

Renner’s trades resulted in illicit profits of $13,520. 

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33. At the time he purchased these securities, Renner knew, or was reckless in not 

knowing, that the information from Cook was material nonpublic information, and that Cook 

disclosed this information in breach of Cook’s duty to Tallgrass. 

34. Renner had previously traded Tallgrass common stock but had never before 

purchased stock options.  

35. Based on material nonpublic information from Cook, on August 9, 2019, Natrop 

purchased 482 out-of-the-money Tallgrass call options, with a strike price of $18 per share and 

an expiration date of January 17, 2020. Tallgrass common stock closed that day at $17.35 per 

share. Natrop’s trades resulted in illicit profits of $43,862. 

36. At the time he purchased these securities, Natrop knew, or was reckless in not 

knowing, that the information from Cook was material nonpublic information, and that Cook 

disclosed this information in breach of Cook’s duty to Tallgrass. 

37. Natrop’s purchase of Tallgrass call options was both the first time he had 

purchased call options since 2017, and also his largest purchase of any type of option since 

2017. 

Rudolph 

38. At all relevant times, Cook and Rudolph were friends and were in regular 

communication. Though they lived in different states, they would meet in person approximately 

three or four times a year and spoke on the phone at least once a week, including conversations 

about investments. Rudolph knew that Cook was a member of Tallgrass’s Board of Directors. 

39. To celebrate his birthday, Rudolph invited Cook to join him on his yacht in the 

Bahamas for a week-long sailing trip in August 2019. Rudolph and Cook spent the week of 

August 2, 2019, on Rudolph’s yacht, visiting several different ports in the Bahamas. While on 

the trip together, Cook, upon information and belief, tipped Rudolph material nonpublic 

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information about Tallgrass, specifically that Blackstone was considering making a take-private 

offer. 

40. On August 6, 2019, while the yacht was docked at a resort on Chubb Cay, 

Rudolph purchased 15,000 shares of Tallgrass common stock at $17.39 per share, based the 

material nonpublic information he had learned from Cook, resulting in illicit profits of $31,035. 

41. At the time he purchased these securities, Rudolph knew, or was reckless in not 

knowing, that the information Cook conveyed to him was material nonpublic information, and 

that Cook disclosed this information in breach of Cook’s duty to Tallgrass. 

42. This trade was the first time Rudolph had ever purchased Tallgrass securities. 

Williams 

43. At all relevant times, Williams and Cook were friends and business associates. 

The two became friends when Williams worked for two companies owned by Cook. Williams 

subsequently became Cook’s personal accountant. Williams acted as an agent for several of 

Cook’s family trusts, directing trading in securities accounts held by the trusts. They regularly 

spoke on the telephone and communicated via text message. Williams knew that Cook was a 

member of Tallgrass’s Board of Directors. 

44. Williams and Cook spoke on the telephone on August 14, 2019, shortly after 

Cook’s telephone calls with the law firm and economic advisor that were subsequently retained 

by the Conflicts Committee after the Blackstone take-private offer was announced on August 27. 

45. Both Cook and Williams were in Cook’s hometown of Hartland, Wisconsin, 

early in the evening on Sunday August 18, 2019. The population of Hartland is approximately 

9,500. 

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46. Between August 14 and 18, 2019, Cook, upon information and belief, tipped 

Williams material nonpublic information about Tallgrass, specifically that Blackstone was 

considering making a take-private offer. 

47. Based on the material nonpublic information he received from Cook, on 

August 19, 2019, Williams purchased 166 out-of-the-money call options: 151 with a strike price 

of $19 per share and an expiration date of October 18, 2019, and another 15 with a strike price 

of $18 per share and an expiration date of September 20, 2019. Tallgrass common stock closed 

that day at $15.94 per share. 

48. Williams purchased additional Tallgrass securities on August 21, 2019, based on 

the material nonpublic information he learned from Cook. On that day, Williams purchased 

4,134 out-of-the-money call options: 1,849 with a strike price of $19 per share and an expiration 

date of October 18, 2019; 1,985 with a strike price of $18 per share and an expiration date of 

September 20, 2019; and 300 with a strike price of $20 per share and an expiration date of 

September 20, 2019. Tallgrass common stock closed that day at $15.70 per share. 

49. Williams’s trades resulted in illicit profits of $463,000. 

50. At the time he purchased these securities, Williams knew, or was reckless in not 

knowing, that the information Cook conveyed to him was material nonpublic information, and 

that Cook disclosed this information in breach of Cook’s duty to Tallgrass. 

51. Prior to these trades, Williams had never purchased options of any issuer. 

Negotiations with Blackstone Continue after the August  
Announcement 

52. As chair of the Conflicts Committee, Cook led negotiations with Blackstone after 

the August Announcement. Throughout September, October, November, and December 2019, 

the Conflicts Committee met regularly and was in frequent communication with its advisors. 

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53. On October 22, 2019, the Conflicts Committee determined that the $19.50 per 

share initial price offered by Blackstone was inadequate. A few days later Blackstone increased 

its offer to $20 per share, which the Conflicts Committee rejected on October 30. On December 

10, 2019, the Conflicts Committee reviewed an announcement to be made in the event the 

parties were unable to reach an agreement. Later that day, with the transaction in doubt, the 

Conflicts Committee made a counter-offer to Blackstone of $23 per share. On December 11, 

2019, Blackstone responded with its final offer, at $22.45 per share, bringing the deal much 

closer to reality. It informed the Conflicts Committee that the offer would be valid until 5:00 pm 

on December 13, 2019. On December 13, 2019, at 3:39 pm, the Conflicts Committee informed 

Blackstone that it would accept the $22.45 per share offer and recommend that Tallgrass 

shareholders approve the transaction. 

54. On December 16, 2019, Blackstone and TGE publicly announced that they had 

entered into a definitive merger agreement, pursuant to which Blackstone would purchase the 

outstanding shares of TGE for $22.45 per share. Following this news, on December 17, 2019, 

the price of TGE stock rose 21% to close at $22.14 per share. After a Tallgrass shareholder vote, 

the take-private transaction closed in April 2020. 

The Cook And Williams Trades in Advance of the December Announcement 

55. Between December 1, 2019, and the December Announcement, Cook, upon 

information and belief, communicated material nonpublic information to Williams, who traded 

based on that information in his personal account and in a Cook family trust. Cook knew, or was 

reckless in not knowing, that trading on the basis of material nonpublic information breached his 

duty to Tallgrass. Cook also knew, or was reckless in not knowing, that the information he 

conveyed to Williams was disclosed in breach of his duty to Tallgrass, and that Williams would 

use the information for trading. Cook received a personal benefit from his tip of material 

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nonpublic information to Williams, including the benefit of providing a gift of information to his 

close friend. 

56. On December 1, 2019, Cook had a call with a Blackstone representative. 

Immediately afterward, Cook had a telephone call with one of the Conflicts Committee 

members. On December 2, 2019, Cook had a telephone call with the other Conflicts Committee 

member. 

57. On December 3, 2019, Williams and Cook had a telephone call and exchanged 

several text messages. During one of those communications, upon information and belief, Cook 

updated Williams on the status of negotiations between Tallgrass and Blackstone.  

58. Following those communications, on December 3, 2019, Williams purchased 

20,000 shares of Tallgrass at $17.70 per share in an account held by a trust called the RNC 2017 

Grat Trust (Cook’s initials are RNC). Cook was the settlor of the RNC 2017 Grat Trust, which 

named his children as beneficiaries, and had received annuity payments from the trust. Williams 

had trading authority for the trust’s securities account. The trust held the stock through the 

closing of the take-private transaction in April 2020. The December 3 trade resulted in profits of 

$88,800. Cook knowingly or recklessly breached a duty he owed to Tallgrass and its 

shareholders through this purchase. 

59. On the morning of December 9, 2019, when it appeared to members of the 

Conflicts Committee that a deal might not be reached, Cook had two telephone calls with 

Williams. Later that day, Williams placed two bearish trades in Tallgrass securities in his 

personal account: he sold 50 previously purchased call options with a strike price of $18 per 

share and 91 previously purchased call options with a strike price of $19 per share, all with an 

expiration date of December 20, 2019. The price of Tallgrass common stock closed that day at 

$18.39 per share. 

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60. Cook left Wisconsin for a vacation in Chile on December 9, 2019. While in 

Miami on a layover that evening, he had telephone calls with an outside advisor for the Conflicts 

Committee, and with each of his fellow Conflicts Committee members. The Conflicts 

Committee met telephonically the morning of December 10 and discussed the possibility that the 

deal might not close.  

61. On the morning of December 10, Williams placed bearish limit orders to sell 

160,000 shares of Tallgrass stock across four of the Cook family trusts. On the afternoon of 

December 10, 2019, while in Chile, Cook had a three-minute telephone call with Williams. 

Upon information and belief, during the conversation Cook provided Williams with material 

nonpublic information regarding the status of negotiations. 

62. On the morning of December 12, 2019, after Blackstone had significantly 

increased its offer, Williams cancelled the unfilled remainder of his previously ordered Tallgrass 

sales. 

63. On December 13, 2019, Williams again began bullish purchases of Tallgrass 

securities. He purchased 200 out-of-the-money Tallgrass call options in his personal account: 

100 call options with a strike price of $20 per share and an expiration date of December 20, 

2019, and another 100 call options with a strike price of $20 per share and an expiration date of 

January 17, 2020. Williams and Cook exchanged two text messages later that day. The Conflicts 

Committee also informed Blackstone that it would accept the $22.45 per share offer at 3:59 pm 

on December 13, 2019. The stock closed at $18.38 per share that day. 

64. On the morning of December 16, 2019, Williams bought another 110 call options 

in his personal account: 100 call options with a strike price of $19 per share and an expiration 

date of January 17, 2020, and another 10 call options with a strike price of $20 per share and an 

expiration date of January 17, 2020. 

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65. When Williams purchased Tallgrass securities in December 2019, he knew, or 

was reckless in not knowing, that the information Cook conveyed to him was material nonpublic 

information, and that Cook disclosed this information in breach of Cook’s duty to Tallgrass. 

66. On December 17, 2019, after the previous night’s announcement of the agreed-

upon price for the take-private transaction, Williams closed out his Tallgrass options positions 

that he had opened in December 2019. Williams’s trades resulted in profits of $61,525. 

Cook was Aware of Tallgrass’s Prohibitions Against Insider Trading and  
His Duty to Keep Nonpublic Information Confidential 

67. At all relevant times, Tallgrass had an Insider Trading Policy that prohibited 

Tallgrass officers, directors, and employees of Tallgrass from purchasing or selling securities 

while in the possession of material, nonpublic information, and from tipping “material nonpublic 

information to anyone who may trade while in possession of such information.” The policy also 

prohibited Company insiders from communicating material nonpublic information about 

Tallgrass to “anyone outside the Company, or to anyone within the Company other than on a 

need-to-know basis.” All Tallgrass officers, directors and employees were required to “review 

and comply” with the Policy.  

68. The Tallgrass Board of Directors, including Cook, was responsible for reviewing 

and approving the Insider Trading Policy, and would review it periodically. 

69. The Company also instituted regular “blackout” periods, during which all 

officers, directors, and employees were prohibited from trading Tallgrass stock. Blackout 

periods typically started at the end of each quarter and ended one or two days after the public 

release of earnings information for that quarter. In addition, the Company’s Insider Trading 

Policy provided that a smaller group of individuals at Tallgrass—which included executives and 

Case 2:24-cv-00313   Filed 03/12/24   Page 16 of 21   Document 1



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Board members—were not permitted to trade in Tallgrass securities at any time without consent 

from the Company’s general counsel. 

Cook Failed to File Required Forms in Connection with Certain 
Purchases and Sales of TGE Securities in Family Trusts 

70. At all relevant times, Cook was a director of Tallgrass, which had stock 

registered under Section 12 of the Exchange Act. As such, Cook was required to report to the 

SEC changes in beneficial ownership of his Tallgrass shares, such as through purchases, sales, 

or gifts, within two business days, in an SEC Form 4, and within 45 days of the end of 

Tallgrass’s fiscal years in an SEC Form 5, unless the transactions were previously reported. 

71. The purpose of Forms 4 and 5 is to provide the investing public with reliable 

information about company insiders’ various transactions in company securities, including the 

date of such transactions, the amount of securities purchased or sold, and the price per share. 

72. Cook failed to file Forms 4 or 5 to disclose numerous purchases and sales of 

Tallgrass stock in 2019 and 2020 by family trusts for which he had a reporting obligation. 

73. Specifically, Cook failed to report the following transactions: 

Trust Date Transaction Quantity 
RNC 2004 Irrev 
Trust 

6/26/19 Purchase 25,000 
12/10/19 Sale 14,919 
12/12/19 Sale 800 
2/28/20 Sale 2,553 
3/17/20 Purchase 3,000 

RNC 2011 
Irrevocable Trust 

6/26/19 Purchase 25,000 
12/10/19 Sale 11,180 
12/11/19 Sale 38,820 

RMC Irrevocable 
Trust of 2014 

12/10/19 Sale 8,441 
12/11/19 Sale 14,324 
2/28/20 Sale 35,114 
3/17/20 Purchase 45,000 

RNC 2014 GRAT 11/25/19 Sale 40,000 
RNC 2017 GRAT 12/3/19 Purchase  20,000 
TMC 2014 GRAT 11/25/19 Sale 40,000 

 

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FIRST CLAIM FOR RELIEF 

Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 
(All Defendants) 

74. The Commission re-alleges and incorporates by reference each and every 

allegation contained in the paragraphs above. 

75. All of the Tallgrass shares and call options Defendants purchased are securities. 

76. Cook learned material, nonpublic information about a potential Blackstone take-

private offer as a result of his position as an independent director of the Tallgrass Board. Cook 

also learned material nonpublic information about the negotiations between Tallgrass and 

Blackstone as Chair of the Tallgrass Conflicts Committee. Cook owed a fiduciary or similar 

duty of trust and confidence to Tallgrass and its shareholders to keep the information 

confidential and refrain from trading in Tallgrass securities or tipping the information to others. 

Cook knowingly or recklessly breached that duty through a purchase of Tallgrass securities. In 

breach of that duty, Cook also communicated material, nonpublic information to the Tippees, 

knowing, or recklessly disregarding, that they would use the information in connection with 

securities trading. Cook communicated material, nonpublic information to the Tippees in 

exchange for a personal benefit or with the expectation of receiving a benefit. 

77. The Tippees purchased Tallgrass securities on the basis of material nonpublic 

information they learned from Cook, who had obtained the information as a result of his position 

as an independent director of the Tallgrass Board and Chair of the Tallgrass Conflicts 

Committee. The Tippees purchased Tallgrass securities knowing, or being reckless in not 

knowing, that the information they received from Cook was material and nonpublic, and that by 

conveying this information to them, Cook had breached his duty to Tallgrass to keep the 

information confidential. 

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78. By engaging in the conduct described above, Defendants, directly or indirectly, in 

connection with the purchase or sale of securities, by use of means or instrumentalities of 

interstate commerce, or of the mails, with scienter: (a) employed devices, schemes or artifices to 

defraud; (b) made untrue statements of material facts or omitted to state material facts necessary 

in order to make the statements made, in the light of the circumstances under which they were 

made, not misleading; and (c) engaged in acts, practices, or courses of business which operated 

or would operate as a fraud or deceit upon other persons, including purchasers and sellers of 

securities. 

79. By reason of the foregoing, Defendants, directly or indirectly, violated, and, 

unless enjoined, are reasonably likely to continue to violate, Exchange Act Section 10(b) 

[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM FOR RELIEF 

Violations of Exchange Act Section 16(a) and Rule 16a-13 Thereunder 
(Cook) 

80. The Commission re-alleges and incorporates by reference each and every 

allegation contained in the paragraphs above. 

81. Cook, as an officer or director of an issuer with a class of equity securities 

registered pursuant to Exchange Act Section 12 [15 U.S.C. § 78l], failed to timely and 

accurately file Forms 4 and Forms 5 with the Commission containing the information required 

therein. 

82. By reason of the foregoing, Cook violated and, unless enjoined, will again violate 

Exchange Act Section 16(a) [15 U.S.C. § 78p(a)] and Rule 16a-3 [17 C.F.R. § 240.16a-3] 

thereunder. 

 

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PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a final judgment: 

Permanently restraining and enjoining Defendants from, directly or indirectly, violating 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b) and Rule 10b-5 thereunder [17 C.F.R. 

§ 240.10b-5]; 

Ordering Defendants to pay civil monetary penalties pursuant to Section 21A of the 

Exchange Act [15 U.S.C. § 78u(d)(2)] and, as to Cook, Section 21(d)(3) of the Exchange Act 

[15 U.S.C. § 78u(d)(3)]; 

Ordering Defendants to disgorge all ill-gotten gains by which they were unjustly enriched, 

with prejudgment interest thereon, as a result of the alleged violations pursuant to Exchange Act 

Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7); 

Imposing an officer and director bar against Cook pursuant to Section 21(d)(2) of the 

Exchange Act [15 U.S.C. § 78u(d)(2)]; and 

Granting any other and further relief this Court may deem just and proper. 

  

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21 
 

DEMAND FOR JURY TRIAL 

Pursuant to Rule 38 of the Federal Rules of Civil Procedures, the Commission demands 

trial by jury in this action of all issues so triable. 

Date: March 12, 2024       

Respectfully submitted, 

s/ Dean M. Conway          
Dean M. Conway  
D.C. Bar No. 457433 
100 F Street, N.E. 
Washington, DC 20549 
Phone: (202) 551-4412 

   Email: [email protected] 
 

Attorneys for Plaintiff 
U.S. SECURITIES AND EXCHANGE 
COMMISSION 
 

Of Counsel 
Brian Quinn 
Brian Vann 
David Frisof 
 

Case 2:24-cv-00313   Filed 03/12/24   Page 21 of 21   Document 1

mailto:[email protected]

	COMPLAINT
	SUMMARY
	VIOLATIONS AND RELIEF SOUGHT
	JURISDICTION AND VENUE
	DEFENDANTS
	COMMONLY-USED TRADING TERMS
	FACTS
	Background of the Blackstone Take-Private Offer
	Blackstone Prepares to Make a Take-Private Offer
	Cook Tipped Friends and Associates in Advance of the August Announcement
	Renner and Natrop
	Rudolph
	Williams

	Negotiations with Blackstone Continue after the August
	Announcement
	The Cook And Williams Trades in Advance of the December Announcement
	Cook was Aware of Tallgrass’s Prohibitions Against Insider Trading and
	His Duty to Keep Nonpublic Information Confidential
	Cook Failed to File Required Forms in Connection with Certain
	Purchases and Sales of TGE Securities in Family Trusts

	FIRST CLAIM FOR RELIEF
	Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
	(All Defendants)

	SECOND CLAIM FOR RELIEF
	Violations of Exchange Act Section 16(a) and Rule 16a-13 Thereunder
	(Cook)

	PRAYER FOR RELIEF
	DEMAND FOR JURY TRIAL