A former employee of a Pennsylvania-based gaming company was accused of insider trading that netted him more than $500,000, the Securities and Exchange Commission and the U.S. Attorney’s Office in Philadelphia both announced Monday.
The SEC announced insider trading charges against David Roda, a former software engineer at Penn National Gaming’s subsidiary, Penn Interactive Ventures. Meanwhile, the Philadelphia U.S. Attorney’s Office announced that Roda, 36, of Philadelphia, was charged by Criminal Information with insider trading.
Roda’s alleged insider trading was in connection with Penn National’s acquisition of Score Media last year. Penn National is based in Wyomissing, Pa., and is involved in both the bricks-and-mortar casino business as well as online gaming.
Score Media specializes in sports information, including sports wagering, and is prominent in Canada. Penn National acquired Score Media in 2021, presumably to bolster its own sports wagering business.
Penn National also owns three Pennsylvania gambling facilities.
It most recently opened Hollywood Casino York last August.
It includes a Barstool Sportsbook for Pennsylvania sports betting and a race book.
Arrests in Greater Detail
The SEC’s complaint alleges that, while employed at Penn Interactive, Roda was told Penn National was interested in Score Media and also was told he should not trade on that information.
However, Roda purchased 500 call options on Score Media in multiple transactions for approximately $20,000, not long before the deal was announced, the U.S. Attorney’s Office said in a news release.
Plus, Roda told a friend, Andrew Larkin, who then purchased 375 Score Media shares.
According to an account by the SEC, Score Media’s stock price increased nearly 80 percent after the two companies announced the deal. After the announcement, Roda and Larkin sold their holdings.
The U.S. Attorney’s news release said Roda netted about $560,000. The SEC noted Larkin sold his holdings for a little more than $5,600.
According to the SEC: “Roda has agreed to be permanently enjoined from violating (antifraud provisions of the securities law) and has agreed to pay disgorgement, prejudgment interest, and a civil penalty to be determined by the Court at a later date. 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. The settlements are subject to Court approval.”
In their news releases, federal investigators and the SEC had stern words regarding insider trading.
“David Roda allegedly traded on material, non-public information and made out like a bandit,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Insider trading like that is patently unfair to investors and a direct threat to the integrity of our financial markets. The FBI takes this crime seriously, and if you decide the risk of such illegal behavior is worth the potential reward, know that we will investigate and ensure you’re held accountable.”