Former Penn Interactive Developer Accused of Insider Trading
The U.S. Securities and Exchange Commission (SEC) has accused David Roda, a former software developer at Penn Interactive Ventures, of unlawful trading based on inside information related to the acquisition of Score Media and Gaming by Penn National Gaming.
The SEC filed a legal complaint in the U.S. District Court for the Eastern District of Pennsylvania, asserting that Roda, while working at Penn Interactive, gained access to confidential details about Penn National’s takeover of the Canadian firm theScore and was instructed not to use this knowledge for personal financial gain.
Roda disregarded his responsibilities and purchased 500 out-of-the-money call options on Score Media in the period leading up to the public announcement of the acquisition. The acquisition was finalized last October, following its announcement in August.
Roda also shared this confidential information with his acquaintance, Andrew Larkin, who subsequently bought 375 shares of Score Media stock. The SEC has also brought charges against Larkin for his actions.
As per the U.S. Securities and Exchange Commission (SEC), the stock price of Score Media shot up by nearly 80% after the public announcement of the agreement between Penn National and Score Media. Subsequently, Roda and Larkin sold their shares, generating a profit of $560,762 (£460,873/€538,199) and $5,602 respectively.
The SEC’s legal action claims that Roda and Larkin violated anti-fraud regulations of securities law.
Roda agreed to a permanent ban from violating these regulations and consented to pay restitution, pre-judgment interest, and a civil fine, the amount of which will be decided by the court at a later time.
Larkin neither admitted nor denied the accusations but agreed to a permanent ban from violating anti-fraud regulations of securities law and to pay over $11,000 in restitution and penalties.
Furthermore, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against Roda.
“As we assert in our legal action, Roda was entrusted by his employer with significant, market-influencing information, and he breached that trust by using that information to trade and by informing his friend so they both could benefit,” stated Scott Thompson, Acting Regional Director of the SEC’s Philadelphia Regional Office.
“When employees like Roda misappropriate and exploit confidential information to trade, it weakens market confidence. The SEC remains dedicated to identifying, investigating, and prosecuting those who engage in insider trading.”
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