Former Penn National Software Engineer Charged with Insider Trading

The Securities and Exchange Commission (SEC) today said it’s charging an ex-Penn National Gaming (NASDAQ:PENN) employee with insider trading stemming from the casino operator’s $2 billion purchase of Score Media and Gaming.

In a complaint filed in federal district court in Philadelphia, the SEC alleges David Roda, a former software engineer at Penn’s Penn Interactive Ventures (PIV) unit, purchased call options on Score Media in advance of his employer announcing the acquisition to the public.

In breach of his duties, Roda purchased 500 out-of-the-money call options on Score Media in the weeks and days leading up to the announcement of the acquisition,” said the SEC.

The commission asserts that as a PIV staffer, Roda obtained privilege information about Penn potentially acquiring Score Media “with admonitions not to trade on that information.”

In an effort to capitalize on the approval of single-game wagering in Canada and to bring gaming technology in-house, Penn announced the $2 billion cash and stock takeover of Score Media in August 2021. Prior to that, the regional casino giant owned 4.7% of the Canadian media and gaming outfit.

Roda Made Bank, Tipped Friend

Options are leveraged instruments and calls — the bullish contracts — typically surged on mergers and acquisitions news, producing rapid short-term gains for buyers that held the contracts prior to the news hitting the wires.

“According to the SEC’s complaint, Score Media’s stock price increased nearly 80 percent after Penn National and Score Media publicly announced their deal, following which Roda and Larkin sold their holdings for unlawful profits of $560,762 and $5,602, respectively,” notes the commission.

Roda and Larkin, both of Philadelphia, are charged with violating the antifraud provisions in US securities laws. Separately, the U.S. Attorney’s Office for the Eastern District of Pennsylvania today unveiled criminal charges against Roda.

“Without admitting or denying the allegations in the SEC’s complaint, Larkin has agreed to be permanently enjoined from violating the antifraud provisions of the securities laws and to pay more than $11,000 in disgorgement and penalties,” adds the SEC.

A court must approve that settlement.

Insider Trading Popping Up Across Gaming Industry

The Larkin’s and Roda’s flap controversy isn’t the first recent encounter of the gaming industry with insider trading.

IAC/InterActiveCorp (NASDAQ:IAC) Chairman Barry Diller, whose company is the largest non-institutional shareholder in MGM Resorts International (NYSE:MGM), is under federal investigation stemming from options trades on Activision prior to Microsoft (NASDAQ:MSFT) announcing it’s acquiring the Call of Duty publisher for $68.7 billion.

However, Diller was recently cleared for limited licensing by Nevada regulators.

Speaking of MGM, that company said in May it’s offering $607 million for Sweden’s LeoVegas. Last week, Sweden’s Economic Crime Authority (SEC) said it’s looking into possible insider trading in the gaming company’s shares prior to the MGM announcement becoming public.

The post Former Penn National Software Engineer Charged with Insider Trading appeared first on Casino.org.

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