A former Penn National Gaming software engineer is facing charges of insider trading in connection to the company’s acquisition of Score Media and Gaming.
The Securities and Exchange Commission announced insider trading charges Monday against David Roda, former director of backend architecture for Penn Interactive Ventures, a Penn National subsidiary. Roda and a friend, Andrew Larkin, allegedly profited from inside information related to the company’s $2 billion acquisition of Score Media and Gaming in August 2021.
The SEC filed the complaint in federal district court in Philadelphia. According to his LinkedIn, Roda left Penn National in March.
“As we allege in our complaint, Roda was entrusted by his employer with critical, market-moving information, and he betrayed that trust by using the information to trade and also tip his friend so they could both profit,” Scott A. Thompson, co-acting regional director of the SEC’s Philadelphia Regional Office, said in a release. “When employees like Roda misappropriate and trade on confidential information, it erodes market confidence. The SEC remains committed to finding, investigating, and charging those who engage in insider trading.”
Details of Penn National insider trading
The SEC is charging both men with violating the antifraud provisions of the securities laws.
After receiving confidential information for his job, Roda allegedly purchased 500 out-of-the-money call options on Score Media, according to the SEC release. Roda also allegedly informed Larkin of the acquisition, who in turn purchased 375 shares of Score Media.
Following Penn National’s announcement of the acquisition, Score Media stock price increased nearly 80%. The pair sold their shares for profits of $560,762 and $5,602, respectively.
Both Roda and Larkin agreed to settlements that are subject to court approval.
Roda agreed to pay disgorgement, prejudgement interest and a civil penalty, which will be determined later.
Larkin will pay more than $11,000 in disgorgement and penalties.
US Attorney pursuing charges
The US Attorney’s Office for the Eastern District of Pennsylvania also announced criminal charges against Roda. The Federal Bureau of Investigation performed the investigation.
“Insider trading undermines faith in our financial markets and harms ordinary investors who play by the rules,” US Attorney Jennifer Arbittier Williams said in a statement. “As alleged, David Roda placed himself above the law by using information to which he had privileged access to cheat the market and other investors. Our Office will continue to work with our law enforcement partners to maintain the integrity of the financial markets.”
Penn National sports betting update
Earlier this month, theScore Bet announced it will leave US sports betting July 1 to focus on Ontario sports betting.
The plan allows Penn National’s other sportsbook, Barstool Sportsbook, to focus on US sports betting.
Penn National purchased 36% of Barstool in 2020 for $136 million.