A former employee of a Pennsylvania-based online gambling company has been charged with insider trading, the Securities and Exchange Commission announced.
The SEC filed a complaint in federal district court against David Roda of Philadelphia, a former software engineer at Penn National Gaming’s subsidiary Penn Interactive Ventures. According to the allegations, Roda was given confidential information about Penn National’s interest in acquiring Score Media and Gaming, based in Toronto. He was admonished not to trade on that information.
But the complaint said that Roda bought 500 out-of-the-money call options on Score Media in the weeks before the acquisition was announced and also tipped off his friend Andrew Larkin, who bought 375 shares of Score Media.
After the deal was announced Score Media’s stock price went up by 80 percent, and Roda sold his stock for a profit of nearly $561,000 while Larkin made over $5,600.
“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,” said Scott A. Thompson, Co-Acting Regional Director of the SEC’s Philadelphia Regional Office. “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.”
Roda and Larkin were both charged with violating the antifraud provisions of the securities laws. Roda agreed to pay disgorgement, prejudgment interest, and a civil penalty to be determined at a later date. Larkin, while not admitting or denying the allegations, agreed to pay more than $11,000 in disgorgement and penalties. Both men agreed to be permanently enjoined from violating the antifraud provisions of the securities laws. In a parallel action, the U.S. Attorney’s Office announced criminal charges against Roda.
The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (888) 655 6002 or through our online contact form for a no-cost evaluation of your matter.